“It used to be cool for an artist to publicly carp about record companies. Now all it serves to do is convince music fans that they don’t need to buy. That doesn’t help anyone’s interest.”
——Hilary Rosen
Labels Suddenly Go on the Offensive
As expected, disaffected artists have taken advantage of Grammy week to further voice their beefs with the labels. What wasn’t expected was that the record industry would take this opportunity to finally make its own position clear in a series of seemingly coordinated gestures that included the launch of the California Music Coalition.

In a Wall Street Journal story published on Grammy eve (2/26), reporter Jennifer Ordonez retraced MCA Records’ development of would-be starlet Carly Hennessy (who, as it happens, is managed by CMC co-architect Miles Copeland). The carefully timed piece marked the first instance in which any of the Big Five has gone public in detailing the expenditures involved in trying to break a new act. “The story of MCA and Ms. Hennessy shows the dysfunctional economics of the music industry at work,” Ordonez wrote, and the numbers bear her out: “The label so far has spent about $2.2 million to make and market her [debut] album... So far, it has sold only 378 copies—amounting to about $4,900 [per unit] at its suggested retail price.

“In many other industries,” Ordonez continued, “this would be considered an extraordinary bomb. But in today's troubled music business, it's routine. Of the thousands of albums released in the U.S. each year by the five major record companies, fewer than 5% become profitable, music executives say.”

Having failed to make an impression with Hennessy after two stiff singles, MCA has shifted its focus to Europe. "If we can't find any market in the world that validates our view that she is a talent, then we have to question whether or not we move forward," Boberg told Ordonez.

Copeland, meanwhile, laid out his worst-case scenario for his act to the reporter: “I can go to a new company [if MCA drops Hennessy] and say, 'Hey, we've all learned a lot.' We can try a second time at a vastly reduced price.”

According to Ordonez, Don Henley, Sheryl Crow and other stars contend “that labels unfairly enforce [inequitable] deals because they need to offset their lavish spending on ill-conceived acts that never make it.”

Along with this “lavish spending,” the reporter cites deregulation of the radio industry and the takeover of music retail by superstores as key factors in the increased cost of doing business. “As a result,” she writes, “industry executives estimate that major-label releases must on average sell about 500,000 copies just to break even. Last year, of the 6,455 new albums distributed in the U.S. by major labels, only 112 have sold at least that many.”

Whatever Ordonez’s intent, her Page One piece casts the music biz in a more sympathetic light than anything that has appeared in the mass media since the seven-year brouhaha heated up. 

Also on Feb. 26, RIAA President/CEO Hilary Rosen sent HITS an open letter with the heading, “Common Ground in Music Industry Challenges.” In it, she accuses artists of “play[ing] a role in the rising consumer cynicism about buying music. It used to be cool for an artist to publicly carp about record companies. Now all it serves to do is convince music fans that they don’t need to buy. That doesn’t help anyone’s interest.” 

Otherwise, however, Rosen’s tone is conciliatory. “We are not the first family to fight publicly about money,” she writes, “and we won’t be the last. But the context in which we scrap is that of a very strong set of relationships and mutual interests. Our family needs to tell that part better.”

Rather than attacking the Recording Artists Coalition, Rosen practically caresses it in her statement: “RAC is being funded by a stellar group of concerts this week in Los Angeles. One of the priorities of RAC is to push for legislation in Sacramento that would allow artists to break recording contacts after seven years with no consequences. There is no excuse for a record label not to live up to contractual promises in accounting or anything else.”

But in mid-paragraph, Rosen takes the offensive: “That philosophy works two ways,” she asserts. “I don’t think that total repeal of the damages provision of the ‘seven-year’ law is fair—people should have to live up to their agreements. But I know there is room for common ground on the issue, and the companies I represent are committed to working with RAC to find the right compromise.”

Here are more excerpts from Rosen’s letter:

“I am glad that featured artists are finally organizing. Those of us who work on policy issues could use the help. It was lonely for Dr. Dre and Metallica to be with us out there on Napster without the vocal support of other artists… So, at the great concerts put on by the Recording Artists Coalition this week, don’t be shocked if somewhere in the aisles there are label executives enjoying every minute of the show (except those when they might be trashed from the stage!). Because that is why we are all in this business—for the music.

“The Recording Artists Coalition has an important role to play. I know we will fight, sometimes too loudly, and we'll come to a resolution, and then there'll be something else. But the constant fact is that we share a common purpose: to promote artists and those who invest in their development.

“So while the imminent demise of the music industry is prematurely predicted in cynical circles, those of us who love music—and know that there are passionate fans out there—will keep working together… Our government knows this industry is a vital economic participant in a favorable balance of trade and is working globally to protect us. This is still, and for a long time will be, a business that is good and does good.”

Surely you have the time to take a look. (8/7a)
Is mining the past the future? (8/7a)
The kids are not alright with Trump. (8/7a)
And the streams just keep on coming. (8/7a)
Interscope's co-MVPs (8/7a)
They're so dreamy.
It's a conspiracy, because everyone does it.
No, but we're thinking about cookies.
Protest songs that sound like now.

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