Battle Heats Up Among Artists, Labels, & Digital Downloading

Musical artists have banded together to create the Featured Artists’ Coalition in order to demand greater control and ownership over music that’s distributed online and, more importantly, for a larger cut of the revenue pie. While it's easier to determine who gets what when a physical CD is sold through a retailer, things become stickier when you’re looking at individual tune downloads sold through various Websites. It’s like déjà vu with the Hollywood Writer’s Strike, which just took place late last year, and which centred around, among other issues, video content distribution online.

The organization is asking, among other things, that artists always retain ownership of their work, that all agreements are conducted in a “fair manner” (you mean this isn’t the case now?), and that artists must always be informed on how their work will be exploited. Recently, for example, artist Jack White wrote a song for the new James Bond flick, which was then reportedly unbeknownst to him released first in a Coca Cola commercial.

Artists are also asking that copyright be by license, not by assignment, and be limited to 35 years. When it comes to performers that don’t write their own work, these guys are asking that they receive the same rights as the authors themselves.

The artists involved in the Coalition already numbers more than 60, and include some really big name musical artists like Radiohead, The Verve, Craig David, Robbie Williams, and the Kaiser Chiefs.

It was only a matter of time. While we have seen a battle ensue within the music industry ever since digital music downloading has taken over, artists have never really taken a major, unified stand. Music labels have fought it out to create favourable deals with digital downloading companies, and have even taken legal action against illegal, peer-to-peer file sharing sites. But have any of these deals really worked in favour of the artists?

It seems that while everyone involved has slowly begun to warm to the reality that is digital music downloading rather than trying to stop it, another issue has been brewing: payment. A song sells for $0.99 on iTunes versus a full, $20 CD in the store. Who gets what out of this deal? Can we really divide profits from a buck 50 ways in a manner that looks out for the interests of all involved versus a full CD?

It sounds like whatever the current situation is, artists aren’t happy. And while the record labels or digital download sites could easily turn up their noses to the artists and say “too bad”, the reality is that these are the guys actually making the music. Back in the day, artists may have been at the mercy of the guys who could get their music sold, and get their name exposed to the public. It wasn’t so easy to record, create, and sell your own CD: what struggling artist had the means to do that? But today, it’s pretty easy to set up your own digital download Website, or to get your music out to millions with just one click (MySpace, anyone?) So it’ll be interesting to see how this drama unfolds.

Record Labels Struggle While Artists Thrive

A new report from IBISWorld paints an interesting picture about the future of the music industry. It points out that, while record labels are struggling in light of the increase in digital downloading and Internet consumption, artists are actually thriving. And why wouldn't they be? They now have a clear line of communication between them and essentially an entire world of music lovers.

"Having initially fought downloading, rather than looking at ways of legally exploiting and profiting from it, record labels are now finding themselves playing catch up," said George Van Horn, Senior Analyst at IBISWorld.

Indeed, what's happening is that new and emerging artists are harnessing the power of the Web to promote their music, and in turn, profiting directly from their own music distribution, since they own the rights to it.

"Digital technology makes it easier to artists to dispense with record labels and publishers," Van Horn frankly stated.

While this may be true, artists will still need someone with good business sense that can steer them toward the right avenues of distribution, whether it be via ad-supported Websites, pay download online stores, or yes, even the creation and distribution of physical CDs. Eventually, the mass craziness that is music all over the 'net will require some proper management. Whether it's a record company, an independent label, or just simply an agent, remains to be seen.

Related to this, IBIS has an interesting perspective on how digital downloading can actually help the music industry, rather than harm it. "Overall demand for music may actually increase as more fans access music by artists they were previously unaware of, creating opportunities and possibly increasing the value of assets held by the industry."

I never understood how record companies could frown upon mass exposure of an artist via the 'net. Isn't that what you're attempting to accomplish in the first place? To get this artist's name "out there"?

Another interesting tidbit of information: reportedly mobile phone ringtone licensing has the potential to become one of the biggest money-making ventures for the music industry. Who knew that the invention of the polyphonic ring tone could pay the rent on that mansion that the latest pop sensation just paid millions for?

The reality is that the entire music landscape is changing, and the sooner all involved realize this, the sooner everyone can profit from the changes instead of trying to prevent them.