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STRIFE WITHIN THE RIAA

RAC, Possible Grammy Boycott, Internet Strategy Among the Issues Causing Friction
Insiders saying Jeff Kwatinetz's Democratic fundraiser this week, which added $300k-plus to the Dems' Congressional Committee war chest, coupled with the expected $1 million to be raised by the Recording Artists Coalition concerts prior to the Grammys next week, will serve to raise the price of poker being played in both Sacramento and Washington, as issues raised by the RAC and Calif. Sen. Kevin Murray appear increasingly on federal legislators' radars, including those of a saber-rattling Rep. John Conyers and Speaker of the House hopeful Dick Gephardt, both of whom spoke at the Kwatinetz shindig. There's talk that the lack of public response from high-level Big Five officials has created a press vacuum on the label side, even as the avalanche of coverage of artist concerns continues, with some even saying a visible boycott of the Grammys is being tossed around by artists and their reps.

Those in the know are saying this imbalance is contributing to some execs rethinking their hard-line positions, and that these same doubters are also pointing a finger at the majors' hard-line Internet strategy, now widely acknowledged to be a backfired protectionist policy that may have won battles in the courts but is losing the war.

The upshot of this is that some believe that friction within the RIAA's Executive Committee may have increased to the point that one or more member companies are considering breaking ranks. Meanwhile, another possible Big Five flashpoint is the Dixie Chicks' fraudulent-accounting suit against Sony. Were they to be signed by another RIAA-member label, tongues are wagging that the Chicks would be willing to indemnify said label. No leap of logic is required to see that such moves could further erode the sometimes tenuous relationships that have held the RIAA together. As these situations develop, only one thing's certain, and we've said this before: There's action to come. Buckle up.

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