Higher Music Fees at Nightclubs

In Australia, nightclubs pay record labels and artists a royalty fee of 7 Australian cents per guest but "under a recent copyright settlement [the] rate has risen to 50 cents per customer, and it is set to jump to 1.05 dollars, or 84 U.S. cents, in a few years." The Phonographic Performance Co of Australia chief executive, Stephen Peach argues that "Without music, there wouldn't be a nightclub," therefore paying only 7 cents out of a $10-15 cover for music plus the money that comes in from people buying liquor just "doesn't seem right."

The international body that governs record royalty payments, IFPI notes that royalty revenue has increased for the record industry by 16 percent, while music sales have fell by 8 percent. IFPI is urging that other countries follow Australia's lead because it is aggressively pushing to raise royalty revenues for the industry. Do you think nightclubs should pay fees for playing music? They pay fees for selling liquor, so why not? But it would have to be reasonable because owning and profiting from a nightclub is hard enough. We'll see if this discussion gets here soon as the concern now seems to radio. For more info on this visit the NY Times.

What's the Deal with the 360 Deal?

Yesterday, I attended a panel on 360 deals at Cardozo School of Law which featured speakers Amaechi Uzoigwe (Entrepreneur and co-owner, Definitive Jux Records), Elliot Resnik (Entertainment Attorney at Law) and Rand Levin (VP of Business and Legal Affairs, Universal Motown Republic Group). The panel which was moderated by Jeff Liebenson (Counsel at Herrick, Feinstein LLP) unleashed a wealth of viewpoints but still left me frustrated because there still seems to be an unwillingness to change. Amaechi who is a strong advocate for artists made the point that there are many other industries benefiting from the production of music and that the music industry should get a piece of those revenues. He pointed out that the $20 billion radio industry which was once a tool to promote recorded music no longer serves that purpose and as a result should now pay recorded music royalties as the rest of the world does. Amaechi also proposed a royalty on mp3 devices and video games instead of the current flat rate model. The 360 deal enables the record label to partake in an equity role with the artist, taking a piece of publishing, touring, merchandising and whatever revenue streams the artist generates via acting, sponsorship, etc. This potentially puts the label at war with the artist manager who traditionally gets a piece of everything the artist makes. Amaechi believes that industry people need to stop cannibalizing one another and work together to grow the pie and bring in music royalties. As the 360 deal becomes more prevalent it inherently changes the position of the record label and makes it well..no longer a record label and in a sense an entertainment agency. The biggest argument over 360 deals is that it is unfair to the artist and that major labels don't have the capacity to fulfill and work on the revenues they're claiming pieces of. Why should a record label receive money from an artist appearing on a television show or film which they had nothing to do in setting up? Rand argues that artists know they have to do more than music to do well and a 360 deal can help support that. I say only if the record labels are willing to change, completely change and serve the interest of the artists. The first step that majors should take is earning a stake in touring and being dedicated 100 percent in the success of an artist's tour and at the same time work with artists for their long term success not turning a hit every quarter. But corporate interests will always get in the way of this unfortunately, which is why the rise of the artistic middle class is so vital...so we can still have great music.

New Web Anti-Piracy Regulations Come to France

France has voted to for Internet user's broadband access to be disabled after illegally downloading or sharing music files. 'Creation and Internet Law' permits "a state body to cut off copyright infringers' broadband access after two warnings were issued." The iniative is meant to prevent Internet users from sharing music and not punishing them with ineffective lawsuits. There are a few consumer rights groups and politicians who oppose the plan but the initiative will pass into law after being proofread and confirmed starting Aprill 9th. IFPI, world representative body of music recordings was pleased with the iniative as was European independent label rep, IMPALA. See Billboard.biz for more details.