Courtney Love's Speech
from the Digital Hollywood On-Line Entertainment Conference in NYC (5.16.00)
This is an unedited
transcript of Courtney Love's speech to the
Digital
Hollywood online entertainment conference, given in New York on
May 16.
Today I want to talk about piracy and music. What is piracy?
Piracy is the
act of stealing an artist's work without any intention of paying
for it. I'm
not talking about Napster-type software.
I'm talking about major label recording contracts.
I want to start with a story about rock bands and record
companies, and do
some recording-contract math:
This story is about a bidding-war band that gets a huge deal with
a 20
percent royalty rate and a million-dollar advance. (No bidding-war
band ever
got a 20 percent royalty, but whatever.) This is my "funny" math
based on
some reality and I just want to qualify it by saying I'm positive
it's better
math than what Edgar Bronfman Jr. [the president and CEO of
Seagram, which
owns Polygram] would provide.
What happens to that million dollars?
They spend half a million to record their album. That leaves the
band with
$500,000. They pay $100,000 to their manager for 20 percent
commission. They
pay $25,000 each to their lawyer and business manager.
That leaves $350,000 for the four band members to split. After
$170,000 in
taxes, there's $180,000 left. That comes out to $45,000 per
person.
That's $45,000 to live on for a year until the record gets
released.
The record is a big hit and sells a million copies. (How a
bidding-war band
sells a million copies of its debut record is another rant
entirely, but it's
based on any basic civics-class knowledge that any of us have
about cartels.
Put simply, the antitrust laws in this country are basically a
joke,
protecting us just enough to not have to re-name our park service
the Phillip
Morris National Park Service.)
So, this band releases two singles and makes two videos. The two
videos cost
a million dollars to make and 50 percent of the video production
costs are
recouped out of the band's royalties.
The band gets $200,000 in tour support, which is 100 percent
recoupable.
The record company spends $300,000 on independent radio promotion.
You have
to pay independent promotion to get your song on the radio;
independent
promotion is a system where the record companies use middlemen so
they can
pretend not to know that radio stations -- the unified broadcast
system --
are getting paid to play their records.
All of those independent promotion costs are charged to the band.
Since the original million-dollar advance is also recoupable, the
band owes
$2 million to the record company.
If all of the million records are sold at full price with no
discounts or
record clubs, the band earns $2 million in royalties, since their
20 percent
royalty works out to $2 a record.
Two million dollars in royalties minus $2 million in recoupable
expenses
equals ... zero!
How much does the record company make?
They grossed $11 million.
It costs $500,000 to manufacture the CDs and they advanced the
band $1
million. Plus there were $1 million in video costs, $300,000 in
radio
promotion and $200,000 in tour support.
The company also paid $750,000 in music publishing royalties.
They spent $2.2 million on marketing. That's mostly retail
advertising, but
marketing also pays for those huge posters of Marilyn Manson in
Times Square
and the street scouts who drive around in vans handing out black
Korn
T-shirts and backwards baseball caps. Not to mention trips to
Scores and cash
for tips for all and sundry.
Add it up and the record company has spent about $4.4 million.
So their profit is $6.6 million; the band may as well be working
at a
7-Eleven.
Of course, they had fun. Hearing yourself on the radio, selling
records,
getting new fans and being on TV is great, but now the band
doesn't have
enough money to pay the rent and nobody has any credit.
Worst of all, after all this, the band owns none of its work ...
they can pay
the mortgage forever but they'll never own the house. Like I said:
Sharecropping.
Our media says, "Boo hoo, poor pop stars, they had a nice ride.
Fuck them for
speaking up"; but I say this dialogue is imperative. And cynical
media
people, who are more fascinated with celebrity than most
celebrities, need to
reacquaint themselves with their value systems.
When you look at the legal line on a CD, it says copyright 1976
Atlantic
Records or copyright 1996 RCA Records. When you look at a book,
though, it'll
say something like copyright 1999 Susan Faludi, or David Foster
Wallace.
Authors own their books and license them to publishers. When the
contract
runs out, writers gets their books back. But record companies own
our
copyrights forever.
The system's set up so almost nobody gets paid.
* The RIAA *
Last November, a Congressional aide named Mitch Glazier, with the
support of
the RIAA, added a "technical amendment" to a bill that defined
recorded music
as "works for hire" under the 1978 Copyright Act.
He did this after all the hearings on the bill were over. By the
time artists
found out about the change, it was too late. The bill was on its
way to the
White House for the president's signature.
That subtle change in copyright law will add billions of dollars
to record
company bank accounts over the next few years -- billions of
dollars that
rightfully should have been paid to artists. A "work for hire" is
now owned
in perpetuity by the record company.
Under the 1978 Copyright Act, artists could reclaim the copyrights
on their
work after 35 years. If you wrote and recorded "Everybody Hurts,"
you at
least got it back to as a family legacy after 35 years. But now,
because of
this corrupt little pisher, "Everybody Hurts" never gets returned
to your
family, and can now be sold to the highest bidder.
Over the years record companies have tried to put "work for hire"
provisions
in their contracts, and Mr. Glazier claims that the "work for
hire" only
"codified" a standard industry practice. But copyright laws didn't
identify
sound recordings as being eligible to be called "works for hire,"
so those
contracts didn't mean anything. Until now.
Writing and recording "Hey Jude" is now the same thing as writing
an English
textbook, writing standardized tests, translating a novel from one
language
to another or making a map. These are the types of things
addressed in the
"work for hire" act. And writing a standardized test is a work for
hire. Not
making a record.
So an assistant substantially altered a major law when he only had
the
authority to make spelling corrections. That's not what I learned
about how
government works in my high school civics class.
Three months later, the RIAA hired Mr. Glazier to become its top
lobbyist at
a salary that was obviously much greater than the one he had as
the spelling
corrector guy.
The RIAA tries to argue that this change was necessary because of
a provision
in the bill that musicians supported. That provision prevents
anyone from
registering a famous person's name as a Web address without that
person's
permission. That's great. I own my name, and should be able to do
what I want
with my name.
But the bill also created an exception that allows a company to
take a
person's name for a Web address if they create a work for hire.
Which means a
record company would be allowed to own your Web site when you
record your
"work for hire" album. Like I said: Sharecropping.
Although I've never met any one at a record company who "believed
in the
Internet," they've all been trying to cover their asses by
securing
everyone's digital rights. Not that they know what to do with
them. Go to a
major label-owned band site. Give me a dollar for every time you
see an
annoying "under construction" sign. I used to pester Geffen (when
it was a
label) to do a better job. I was totally ignored for two years,
until I got
my band name back. The Goo Goo Dolls are struggling to gain
control of their
domain name from Warner Bros., who claim they own the name because
they set
up a shitty promotional Web site for the band.
Orrin Hatch, songwriter and Republican senator from Utah, seems to
be the
only person in Washington with a progressive view of copyright
law. One
lobbyist says that there's no one in the House with a similar view
and that
"this would have never happened if Sonny Bono was still alive."
By the way, which bill do you think the recording industry used
for this
amendment?
The Record Company Redefinition Act? No. The Music Copyright Act?
No. The
Work for Hire Authorship Act? No.
How about the Satellite Home Viewing Act of 1999?
Stealing our copyright reversions in the dead of night while no
one was
looking, and with no hearings held, is piracy.
It's piracy when the RIAA lobbies to change the bankruptcy law to
make it
more difficult for musicians to declare bankruptcy. Some musicians
have
declared bankruptcy to free themselves from truly evil contracts.
TLC
declared bankruptcy after they received less than 2 percent of the
$175
million earned by their CD sales. That was about 40 times less
than the
profit that was divided among their management, production and
record
companies.
Toni Braxton also declared bankruptcy in 1998. She sold $188
million worth of
CDs, but she was broke because of a terrible recording contract
that paid her
less than 35 cents per album. Bankruptcy can be an artist's only
defense
against a truly horrible deal and the RIAA wants to take it away.
Artists want to believe that we can make lots of money if we're
successful.
But there are hundreds of stories about artists in their 60s and
70s who are
broke because they never made a dime from their hit records. And
real success
is still a long shot for a new artist today. Of the 32,000 new
releases each
year, only 250 sell more than 10,000 copies. And less than 30 go
platinum.
The four major record corporations fund the RIAA. These companies
are rich
and obviously well-represented. Recording artists and musicians
don't really
have the money to compete. The 273,000 working musicians in
America make
about $30,000 a year. Only 15 percent of American Federation of
Musicians
members work steadily in music.
But the music industry is a $40 billion-a-year business. One-third
of that
revenue comes from the United States. The annual sales of
cassettes, CDs and
video are larger than the gross national product of 80 countries.
Americans
have more CD players, radios and VCRs than we have bathtubs.
Story after story gets told about artists -- some of them in their
60s and
70s, some of them authors of huge successful songs that we all
enjoy, use and
sing -- living in total poverty, never having been paid anything.
Not even
having access to a union or to basic health care. Artists who have
generated
billions of dollars for an industry die broke and un-cared for.
And they're not actors or participators. They're the rightful
owners,
originators and performers of original compositions.
This is piracy.
* Technology is not piracy *
This opinion is one I really haven't formed yet, so as I speak
about Napster
now, please understand that I'm not totally informed. I will be
the first in
line to file a class action suit to protect my copyrights if
Napster or even
the far more advanced Gnutella doesn't work with us to protect us.
I'm on
[Metallica drummer] Lars Ulrich's side, in other words, and I feel
really
badly for him that he doesn't know how to condense his case down
to a
sound-bite that sounds more reasonable than the one I saw today.
I also think Metallica is being given too much grief. It's
anti-artist, for
one thing. An artist speaks up and the artist gets squashed:
Sharecropping.
Don't get above your station, kid. It's not piracy when kids swap
music over
the Internet using Napster or Gnutella or Freenet or iMesh or
beaming their
CDs into a My.MP3.com or MyPlay.com music locker. It's piracy when
those guys
that run those companies make side deals with the cartel lawyers
and label
heads so that they can be "the labels' friend," and not the
artists'.
Recording artists have essentially been giving their music away
for free
under the old system, so new technology that exposes our music to
a larger
audience can only be a good thing. Why aren't these companies
working with us
to create some peace?
There were a billion music downloads last year, but music sales
are up.
Where's the evidence that downloads hurt business? Downloads are
creating
more demand.
Why aren't record companies embracing this great opportunity? Why
aren't they
trying to talk to the kids passing compilations around to learn
what they
like? Why is the RIAA suing the companies that are stimulating
this new
demand? What's the point of going after people swapping
cruddy-sounding MP3s?
Cash! Cash they have no intention of passing onto us, the writers
of their
profits.
At this point the "record collector" geniuses who use Napster
don't have the
coolest most arcane selection anyway, unless you're into techno.
Hardly any
pre-1982 REM fans, no '60s punk, even the Alan Parsons Project was
underrepresented when I tried to find some Napster buddies. For
the most
part, it was college boy rawk without a lot of imagination. Maybe
that's the
demographic that cares -- and in that case, My Bloody Valentine
and Bert
Jansch aren't going to get screwed just yet. There's still time to
negotiate.
* Destroying traditional access *
Somewhere along the way, record companies figured out that it's a
lot more
profitable to control the distribution system than it is to
nurture artists.
And since the companies didn't have any real competition, artists
had no
other place to go. Record companies controlled the promotion and
marketing;
only they had the ability to get lots of radio play, and get
records into all
the big chain store. That power put them above both the artists
and the
audience. They own the plantation.
Being the gatekeeper was the most profitable place to be, but now
we're in a
world half without gates. The Internet allows artists to
communicate directly
with their audiences; we don't have to depend solely on an
inefficient system
where the record company promotes our records to radio, press or
retail and
then sits back and hopes fans find out about our music.
Record companies don't understand the intimacy between artists and
their
fans. They put records on the radio and buy some advertising and
hope for the
best. Digital distribution gives everyone worldwide, instant
access to music.
And filters are replacing gatekeepers. In a world where we can get
anything
we want, whenever we want it, how does a company create value? By
filtering.
In a world without friction, the only friction people value is
editing. A
filter is valuable when it understands the needs of both artists
and the
public. New companies should be conduits between musicians and
their fans.
Right now the only way you can get music is by shelling out $17.
In a world
where music costs a nickel, an artist can "sell" 100 million
copies instead
of just a million.
The present system keeps artists from finding an audience because
it has too
many artificial scarcities: limited radio promotion, limited bin
space in
stores and a limited number of spots on the record company roster.
The digital world has no scarcities. There are countless ways to
reach an
audience. Radio is no longer the only place to hear a new song.
And tiny mall
record stores aren't the only place to buy a new CD.
* I'm leavingr souls.
When you form your business for creative people, with creative
people, come
at us with some thought. Everybody's process is different. And
remember that
it's art. We're not craftspeople.
* Sponsorships *
I don't know what a good sponsorship would be for me or for other
artists I
respect. People bring up sponsorships a lot as a way for artists
to get our
music paid for upfront and for us to earn a fee. I've dealt with
large
corporations for long enough to know that any alliance where I'm
an owned
service is going to be doomed.
When I agreed to allow a large cola company to promote a live
show, I
couldn't have been more miserable. They screwed up every single
thing
imaginable. The venue was empty but sold out. There were thousands
of people
outside who wanted to be there, trying to get tickets. And there
were the
empty seats the company had purchased for a lump sum and failed to
market
because they were clueless about music.
It was really dumb. You had to buy the cola. You had to dial a
number. You
had to press a bunch of buttons. You had to do all this crap that
nobody
wanted to do. Why not just bring a can to the door?
On top of all this, I felt embarrassed to be an advertising agent
for a
product that I'd never let my daughter use. Plus they were a
condescending
bunch of little guys. They treated me like I was an ungrateful
little bitch
who should be groveling for the experience to play for their damn
soda.
I ended up playing without my shirt on and ordering a six-pack of
the rival
cola onstage. Also lots of unwholesome cursing and nudity
occurred. This way
I knew that no matter how tempting the cash was, they'd never do
business
with me again.
If you want some little obedient slave content provider, then
fine. But I
think most musicians don't want to be responsible for your
clean-cut,
wholesome, all-American, sugar corrosive cancer-causing, all white
people, no
women allowed sodapop images.
Nor, on the converse, do we want to be responsible for your
vice-inducing,
liver-rotting, child-labor-law-violating, all white people,
no-women-allowed
booze images.
So as a defiant moody artist worth my salt, I've got to think of
something
else. Tampax, maybe.
* Money *
As a user, I love Napster. It carries some risk. I hear idealistic
business
people talk about how people that are musicians would be musicians
no matter
what and that we're already doing it for free, so what about
copyright?
Please. It's incredibly easy not to be a musician. It's always a
struggle and
a dangerous career choice. We are motivated by passion and by
money.
That's not a dirty little secret. It's a fact. Take away the
incentive for
major or minor financial reward and you dilute the pool of
musicians. I am
not saying that only pure artists will survive. Like a few of the
more
utopian people who discuss this, I don't want just pure artists to
survive.
Where would we all be without the trash? We need the trash to
cover up our
national depression. The utopians also say that because in their
minds "pure"
artists are all Ani DiFranco and don't demand a lot of money. Why
are the
utopians all entertainment lawyers and major label workers anyway?
I demand a
lot of money if I do a big huge worthwhile job and millions of
people like
it, don't kid yourself. In economic terms, you've got an industry
that's
loathsome and outmoded, but when it works it creates some
incentive and some
efficiency even though absolutely no one gets paid.
We suffer as a society and a culture when we don't pay the true
value of
goods and services delivered. We create a lack of production. Less
good music
is recorded if we remove the incentive to create it.
Music is intellectual property with full cash and opportunity
costs required
to create, polish and record a finished product. If I invest money
and time
into my business, I should be reasonably protected from the theft
of my goods
and services. When the judgment came against MP3.com, the RIAA
sought damages
of $150,000 for each major-label-"owned" musical track in MP3's
database.
Multiply by 80,000 CDs, and MP3.com could owe the gatekeepers $120
billion.
But what about the Plimsouls? Why can't MP3.com pay each artist a
fixed
amount based on the number of their downloads? Why on earth should
MP3.com
pay $120 billion to four distribution companies, who in most cases
won't have
to pay a nickel to the artists whose copyrights they've stolen
through their
system of organized theft?
It's a ridiculous judgment. I believe if evidence had been entered
that
ultimately it's just shuffling big cash around two or three
corporations, I
can only pray that the judge in the MP3.com case would have seen
the RIAA's
case for the joke that it was.
I'd rather work out a deal with MP3.com myself, and force them to
be
artist-friendly, instead of being laughed at and having my money
hidden by a
major label as they sell my records out the back door, behind
everyone's
back.
How dare they behave in such a horrified manner in regards to
copyright law
when their entire industry is based on piracy? When Mister Label
Head Guy,
whom my lawyer yelled at me not to name, got caught last year
selling
millions of "cleans" out the back door. "Cleans" being the
records
that
aren't for marketing but are to be sold. Who the fuck is this guy?
He wants
to save a little cash so he fucks the artist and goes home? Do
they fire him?
Does Chuck Phillips of the LA Times say anything? No way! This
guy's a
source! He throws awesome dinner parties! Why fuck with the status
quo? Let's
pick on Lars Ulrich instead because he brought up an interesting
point!
* Conclusion *
I'm looking for people to help connect me to more fans, because I
believe
fans will leave a tip based on the enjoyment and service I
provide. I'm not
scared of them getting a preview. It really is going to be a
global village
where a billion people have access to one artist and a billion
people can
leave a tip if they want to.
It's a radical democratization. Every artist has access to every
fan and
every fan has access to every artist, and the people who direct
fans to those
artists. People that give advice and technical value are the
people we need.
People crowding the distribution pipe and trying to ignore fans
and artists
have no value. This is a perfect system.
If you're going to start a company that deals with musicians,
please do it
because you like music. Offer some control and equity to the
artists and try
to give us some creative guidance. If music and art and passion
are important
to you, there are hundreds of artists who are ready to rewrite the
rules.
In the last few years, business pulled our culture away from the
idea that
music is important and emotional and sacred. But new technology
has brought a
real opportunity for change; we can break down the old system and
give
musicians real freedom and choice.
A great writer named Neal Stephenson said that America does four
things
better than any other country in the world: rock music, movies,
software and
high-speed pizza delivery. All of these are sacred American art
forms. Let's
return to our purity and our idealism while we have this shot.
Warren Beatty once said: "The greatest gift God gives us is to
enjoy the
sound of our own voice. And the second greatest gift is to get
somebody to listen to it."
And for that, I humbly thank you.
- - - - - - - - - - - - - Courtney Love
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