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By, Beth Lipton
Krigel
Staff Writer, CNET News.com
September 15, 1999, 1:40p.m. PT
U RL: http://news.cnet.com/category/0-1005-200-120262.html
A controversial provision in Sony Music contracts is effectively asking
artists to sign away control of their official Web sites for life.
Sony Music has added language to its standard contracts that gives the
company ownership over an artist's name--as well as any variation of
it--for use as a domain name. Moreover, the clause is written as a
lifetime provision that would apply even if the artist and Sony part
ways.
"Sony and its licensees shall have the exclusive right, throughout
the world, and shall have the exclusive right to authorize other
persons, to create, maintain, and host any and all Web sites relating to
the artist and to register and use the name '[artist name].com' and any
variations thereof which embody the artist's name as Uniform Resource
Locators (or 'URLs'), addresses, or domain names for each Web site
created by Sony in respect of the artist," according to a copy of a
Sony Music contract obtained by CNET News.com.
In addition, the contract states: "All such Web sites and all
rights thereto and derived therefrom shall be Sony's property throughout
the territory and in perpetuity."
A Sony Music spokeswoman said the company does not comment on artist
contracts.
The unusual clause runs counter to recent high-profile deals indicating
that the "Big Five" record companies--Sony Music, Universal
Music, BMG, Warner Music, and EM I--are beginning to embrace the
openness of the Internet and relative freedoms the medium accords their
artists. The contract appears to reflect a fear at Sony that it may lose
control over its artists through the Web, according to lawyers and
managers.
At issue is what some say is the gateway to new forms of artist
marketing and distribution on the Web. Today, for example, when a CD is
sold in a retail store, the record company and artist don't get any
information about the buyer. But online, a record company or artist can
ask a consumer to register and provide valuable marketing information
before getting content via stream or download--such as demographic data,
email names, and home addresses.
Then, when a new CD is coming out or an artist's tour is booked in a
particular part of the country, the information can be used to send
messages to fans in the area. That opens up a host of new opportunities
to the music business.
"The URL encompasses everything related to an artist's
career," said John Parres, an Internet specialist who works with
Artists Management Group, a management company founded by Hollywood
mogul Michael Ovitz. "It is the key to everything. To make that a
condition of the contract is way beyond the scope of the contract. The
URL is the relationship between the artist and the fan."
The language in the contract "has to do with control, not just
making money," said Bobby Rosenbloum, an attorney at the Atlanta
office of Greenbern Traurig. Among the firm's clients is hip-hop artist
Canibus, who is signed to Universal Music.
None of the labels operated by Universal insists upon owning an artist's
URL, according to Larry Kenswil, president of global electronic commerce
and advanced technology for Universal Music.
Web sites present business opportunities beyond commercial music.
Canibus's site offers merchandise such as T-shirts and posts songs and
videos that he created on his own and are not part of his record
contract. The site also offers a place where fans can send Canibus
email, which he checks each week, according to the site.
Artist Ice T, who has a deal with online music company Atomic Pop and
has formed his own label, dubbed Coroner Records, said his Internet
efforts have allowed him to forge valuable ties to his fans. He said in
an interview that he has 200,000 fans on his email mailing list, and
"those are the people I'm going to push the album to because
they've already shown interest."
Such overtures could be frowned upon by record companies such as Sony.
Studios that try to rein in artist Web activities want to stop the
artists from "doing anything that could even be perceived as
competing with the label," Rosenbloum said.
Attorney Scott Harrington, a partner with Manatt, Phelps & Phillips,
noted that at issue is not so much an artist's name, but rather his or
her official Web site--especially because many bands are finding that
their names are already owned by someone else online. Still, he added,
the record companies have the right to be an artist's exclusive record
distributor but not to control the artist's official site.
"I don't think they have any more right to this than they have over
the publishing or the merchandise or anything else that isn't their
business," Harrington said. He added, however, that the record
companies "are not saying, 'We own [the URL].' They're saying, 'We
want it if you want to give it to us.' It's not a right--it's a
contractual thing."
But Jeff Price, co-owner and general manager of New York-based
independent label Spin Art Records, pointed out that it can be difficult
for an artist to turn away a deal from a major record label, regardless
of the terms addressing the Web. "If you're a baby band and you're
being offered six figures and you're broke, it's hard to say no,"
Price said. "But you have no concept at that time of what the value
of that URL will be down the road."
Ice T agreed, adding that using Web interests as currency in recording
deals is "a bad thing for any kid who signs a traditional record
contract now or in the next year. They're going to miss this whole
Internet thing because [the record company] owns them for the next seven
years."
Harrington--whose law firm represents artists such as Sheryl Crow,
Everclear, and the Wallflowers, as well as small labels such as
Capricorn and Thump--said the major record companies are realizing that
the future of their business in large part could rely on Web-based,
"lifestyle" communities, which they ultimately want to
control. But all they really have the right to, is sales of recordings
an artist made while under contract to them.
"They don't really know what they're going to do" with control
over artist sites, Harrington said. "Maybe what they need to say is
that in perpetuity you always need a link to us to buy your catalog. But
once you leave the label they don't need to control your official Web
site--they have nothing to do with you anymore."
Some artists view a Web site as part of the services that can be offered
by a record company, along with setting up the recording process, said
Jeremy Welt, head of new media for Maverick Records, which is a joint
venture with "Big Five" company Warner Music. "A lot of
times, an artist will come to me and say, 'Can you register my domain?'
When I do that, I register it under Maverick," he said.
Welt said Maverick has only had one artist leave the label, and in that
case Maverick kept the URL. Maverick continues to host and maintain the
site, but it is only used for marketing--no merchandise or CDs are sold
on it. "All these issues will be dealt with on a case-by-case
basis," Welt said, adding that Warner Music does not have a
company-wide policy on artist URLs either.
Many within the industry say artists should create their own Web sites,
independent of any record company efforts. "Every artist should
have their own site up because it gives their music more exposure,"
Ice T said. "[An artist] can turn himself into a label. He can use
his site to promote other artists. So people come to his site to check
him out and he can say, 'Hey, check out this girl I'm working with' and
sell her records."
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