Op-Ed: Will Labels Share New “Taxes” With Artists?
Former indie promo man David Sherbow shares a very different perspective in this rebuttal to our recent Op-Ed from Music Manager Forum CEO John Webster on the a proposed iPod tax:
Through my independent promotion company I have broken over 100 No. 1 records over the past 10 years. I have managed and booked lots of acts in my life. There is not much I don’t know about record companies and what they do.
Lately, record companies especially are doing everything they can do to manipulate ISP’s and device manufacturers to pay what amounts to a tax to help subsidize creativity and facilitate the future for musical artists everywhere. Does Mr. Webster or anyone else for that matter know exactly how those at the top of the value chain, i.e. record companies, plan on filtering this potential billions of dollars collected by them down to artists at the bottom of the value chain? Mr. Webster does not speak to this.
I have seen a lot of recording contracts in my 30 years in the
business and I don’t remember seeing any clauses anywhere that will
cover how an artist signed to a particular label may share in these
types of proceeds that will be generated from this new "tax."
I have never had faith in the integrity of large record companies distributing their proceeds fairly. Maybe some of that faith will be restored if I can really understand how record companies plan to share this money with their artists and what procedures will be put in place to insure a fair and equitable distribution of these new funds. – David Sherbow
FINALLY! someone asks the pertinent question! of course, none of us indie-type artists who’ve had dealings with major labels have any confidence whatsoever that they will share any future “digital rights” revenue with their artists. hell, i’m not sure most indie labels would! not mention the logistical nightmare involved getting a hold of previous artists on a label, etc.
whatever the technology, it’s hard to see the upside for artists. it has always, sadly, been thus…
Just play their game. Don’t bother waiting for payment. Just get a Canadian to upload your own catalogue – songs, sell them on line and let the Majors chase you down for the cash. Not even the Majors are interested in dropping $50K on the legals.
Yeah, this is the 800 pound gorilla in the room. Glad to see someone in the biz finally asking it.
Its an attempt to pull the ultimate heist on the signed artists by keeping the old but failing formula around the selling of physical CD’s to justify that the artist is in unrecouped status so they can gobble up all the online money (whether its through some widespread ‘tax’ or ad revenue sharing partnerships with Myspace, Imeem, etc…) Most artists signed to a label are in a negative as far as money owed so the labels will use that as the reason why they’re not getting none of the online pie. The few superstars remaining in the business will be able to kick up enough dust to demand some kind of money off of it while other smart artists will build their own interactive destinations and get directly in the streaming action themselves (ex – thisis50.com)
I agree with David Sherbow’s sentiment. However, the reason he doesn’t see the payment provisions in the record contract is because their incorporated into the law. For example, royalties on recording devices and blank media are specifically set out in Chapter 10 of the Copyright Act, with a set amount to go to featured and non-featured artists, and a set amount go to writers.
No label or publisher can dip into these income streams of the artists, so to the extent this concept is extended to other mediums or employed in other nations, it will most assuredly work the same, which is actually BETTER for artists than relying perpetually unrecouped royalty accounts with the label.
Who collects and distributes this fee/tax based on Chapter 10? Who is auditing the books to insure that no skimming is taking place? How are the costs to manage the fund distributed across the beneficiaries? This sounds like an opportunity to charge large administrative fees to artists if you ask me. And that one of the factors that contributed to the collapse of the business in the first place.
Tobias – See http://aarcroyalties.com/new/index2.php – Alliance of Artists and Recording Companies. This is only a “for example” for U.S. administration, and is only meant to say that this is a legitimate revenue stream for artists that bypasses the label. It’s far from perfect, but it’s also far from a bad thing, too.
I should point out that Jon Webster knows a great deal about money filtering from record companies to artists, as he is Chief Executive of the Music Managers Forum, the body that represents artist managers in the UK.
He is all too aware of the issues David Sherbow raises, and has spoken and advised various discussions on the subject (see http://www.musictank.co.uk/events/deal-or-no-deal-the-great-artist-label-trade-off).
This adds credibility to his call for a UK I-Pod tax, which is echoed across all parts of the UK music chain. As part of a progressive system that responds to how people actually use music today, it could be both a sensible and timely initiative.
There is absolutely no way that this license income is going to be given to the majors to distribute.
As CEO of the MMF we are fighting to find out where all the digital income has gone and agree with David Sherbow that too much of it has disappeared into black holes of the majors or in fact anyone else who receives it.
The money will be split up between artists (directly), record companies, publishers, musicians in fact anyone and everyone involved.
As I think I said systems for distribution of monies like this already exist in 25 European countries – some including the financing of programmes deemed good for the whole industry such as financing of rehearsal rooms for young musicians.
Jon Webster