Music Industry Prepares to do Battle with Artists Over Rights to Recordings

I read an excellent article in the New York Times yesterday about musicians reclaiming ownership of their original recordings from labels. Hits like Bruce Springsteen’s “Darkness on the Edge of Town,” Billy Joel’s “52nd Street,” Kenny Rogers’s “Gambler” and Funkadelic’s “One Nation Under a Groove” have generated tens of millions of dollars for record companies over the years, but US copyright law (which was revised in 1978) allows for musicians to regain control of their work via a “termination right” after 35 years, provided that they apply to do so in advance.  Hard to believe, but each of the recordings listed above (and many, many more) are approaching their 35th anniversary.

Illegally downloading of new releases in recent years has left record labels disproportionately dependent on sales revenue from older recordings. Labels can ill afford to lose the proceeds from these sales.  Not surprisingly, the labels contend that the masters belong to them in perpetuity because they are “works made for hire” – works created, not by independent musicians, but by “employees” hired by the labels to record the songs.

The article suggests that the label’s contention is a weak one.  First, musicians typically pay for the making of the records themselves (as well as touring, distribution, etc) via advances against their royalties.  Second, musicians do not receive benefits from, nor are they obligated to, employers in the traditional sense.  As the saying goes, if it walks like an independent contractor…

It will be interesting to see what rights the song writers (if different from the musician performing the song) are entitled to.  Also, as the article suggests, will foreign bands be able to exercise termination rights on their American recordings even though their original contract was signed outside the US?  It looks we’ll all have front row seats to what I’m sure will be a killer performance by the artists and the labels.