RIAA and Labels Pocket Settlement, Ignore Artists

By Brandon Lovested | in Copyright Law, Music | 4 Mar 2008 | No Comments

Is the RIAA only about the money, and not the ethical defense of intellectual property rights of artists? It seems the artists the RIAA supposedly represents have seen little or no money as a result of copyright infringement settlements over the years from major entities like Napster and Kazaa. Those settlements are in the neighborhood of hundreds of millions of dollars. The recording labels claim they’re still trying to figure out how to distribute the money, while the RIAA says legal expenses have eaten most of it up.

Looks like the hunting dogs ate the pheasant.

From a NY Post article:

“Artist managers and lawyers have been wondering for months when their artists will see money from the copyright settlements and how it will be accounted for,” said lawyer John Branca, who has represented Korn, Don Henley, and The Rolling Stones, among others.

“Some of them are even talking about filing lawsuits if they don’t get paid soon.”

Record label sources said corporate bosses are still deciding on how best to split the money. In determining the payout, they said not every artist is owed money and it must be calculated with regard to the level of copyright infringement for each artist.

What’s more, these sources said that after the labels recouped their legal expenses, there wasn’t much left to pass along to the artists.

This reminds me of the motion picture industry, which has a history of short-changing equity participants by claiming the movie “hasn’t made any net profit yet.” An infamous example was the money owed to Art Buchwald, who wrote the underpinnings of the script for the smash hit Coming To America. Paramount Pictures claimed they hadn’t made any net profit on the film, so Buchwald wasn’t owed anything.

Buchwald sued and won his case, but a settlement was reached before the penalty phase of the case went forward. Paramount faced pressure from other studios when it became known that the film industry’s accounting practices were of material interest, and would have to be examined – in minute detail.

This might explain the recording labels’ reluctance to distribute the money – they’re not done calculating expenses to shave down the net profit before it goes to artists. But what about those RIAA legal expenses? What sane person would pursue a course of action that would cost as much or more than the value derived from it? Was teaching the public a lesson worth it?

If the lesson was to teach the public — particularly the young — about corporate greed and obsolete business models, then the answer is yes.