Record companies are on the ropes; there is no doubt about it. While some musicians are actually making more money now through live appearances and merchandising, thanks to the promotional value of digital downloads, the record companies, on the whole, are not.
Most of the hyperbole about piracy comes from the record companies and while they protest that they need Draconian protections to enable them to reinvest in artist development, the truth is that they have not been the best of friends to their artists for decades. And now they are turning on their customers.
I am not a lawyer, but I have seen more than my fair share of contracts in my time. What is notable about record company contracts, aside from the details about options, recoupables and cross-collateralization, is the spirit of these agreements. Record company contracts are generally drafted as if they don’t really care what the artist does artistically and as if they are not deeply committed to the joint project of developing the artist and their market. They read more like somebody lending money to somebody nobody else will lend to, with as many provisions as possible to take the goodies and run away with them, if the artist is a big hit, but equally many provisions that let them cut and run, dumping the product and the artist, if things go badly. There is precious little about the relationship, about joint risk or about collaboration written into them.
They owe more to the ethos of the loan shark than to that of a patron of the arts and creator of popular culture.
It’s a well-worn cliché by now: the starving musicians that sign away everything for a chance at the big time, only to have their dreams and incomes shattered by the fine print in the contracts they have signed and now cannot escape from. Who was it that said “what the big print giveth, the small print taketh away”? It might have been Tom Waits. Billy Joel, when asked what he disliked most about the music business, replied, “the music business“.
This tendency to write such one-sided agreements is a historical artefact from a time when recording artists were thought to be disposable. It springs from a belief that another genius will be along any second. That just isn’t true. There can never be another Freddie Mercury. Artists are not commodities. The market for Impressionist paintings finally realised this, even though no art patron or gallery really bought into the idea during the artists’ lifetimes. New albums by The Beatles are just not being made any more.
I honestly think that some recording artists are destined to appreciate long after they are gone. There is scant evidence of this happening so far, but I think it will happen. What this means is that for record companies (if they survive) to succeed in the future, they are going to have to drop some of the more egregious practices in their contracts. There can be no charge taken for “new technology” (meaning to pay for their CD pressing plant). There are no “breakages” with digital downloads (a charge artists pay to replace the cracked and damaged plastic CD cases). You cannot have the recording for free when some new diffusion medium is invented. Record companies are going to have to become more creative with the sorts of products they offer and with the way they are packaged and marketed. This will involve better agreements with the artists’ publishers and managers too, but it’s time for a change.
The situation is recoverable, for record companies, but they will have to work harder, act with more integrity and they will need to become the trusted allies of their artists and customers alike, rather than everybody’s adversary. They will also have to embrace new technology and arguably newer technology than has even, as yet, existed (more about that in a future post).
If the contracts that record companies put in front of their artists were fairer, more equitable and shared the risks and benefits in a more balanced fashion, the artists would be sticking by their labels right now like glue, rather than seriously considering abandoning them.
What does this tell us about ALL contracts of employment?