Compromise between artists, RIAA falters

One of the most closely watched battles over artists’ rights in the music biz was put on indefinite hold Thursday, after California Sen. Kevin Murray shelved his legislative bid to rescind an amendment that exempts artists from the state’s seven-year limit on service contracts.

The bill, SB 1246, was tabled until at least next year at the request of artists’ rights advocates after long-running efforts to forge a compromise with the Recording Industry Assn. of America faltered earlier this month.

“At the end of the day, we just didn’t make a deal,” Murray (D-Culver City) said. “But clearly there is still some momentum in the artists’ rights movement in general.”

RIAA reps declined to comment on the withdrawal.

The shelving of the bill keeps intact a system favored by the record industry that sees 90% of its acts flop and claims for every big hit it spends an average of $6.3 million promoting 14 or more albums that don’t succeed.

It also gives the recording industry a brief break in its continuing battles in California, as Murray and a cast of entertainment lawyers and accountants have challenged its unique system of labor contracts and accounting practices. It also comes at a time when the industry is being battered on multiple fronts by growing radio monopolies, plunging stock values of parent companies, free online music sharing and estimates that 40% of record sales worldwide are pirated.

California Assemblywoman Rebecca Cohn (D-Saratoga), who chairs the Assembly committee that was to take up the Senate bill shortly, expressed regret that Murray pulled the measure “after over a year of good faith negotiations between the recording labels and the newly formed artist coalition.”

Cohn said the committee would press on with “issues that threaten the entire industry,” such as piracy on the Internet. That topic has been a main priority of the RIAA, which backs federal legislation that would give labels more leeway in using technology to fight cyberpirates.

The seven-year dispute dates back to 1987, when the RIAA successfully lobbied to amend the statute, giving labels the right to sue artists for damages if they don’t fulfill the terms of their contract by the time the seven years is up.

Statute earlier had been a watershed in the film industry, used by actress Olivia de Havilland in 1945 to free herself from onerous contract terms at Warner Bros., and sounding the death knell for the old Hollywood studio system.

Recording artists such as Don Henley and Courtney Love have invoked the statute in an effort to win the same freedom for themselves, arguing that the current contract system amounts to little more than indentured servitude. But labels say they need some way to keep stars from skipping out on them after just one or two albums.

Talks began last year in an effort to bridge the gap between labels and artists. After months of closed-door discussion, the RIAA last week went public, claiming that a potential deal was threatened by artists’ requests to make the terms of the compromise retroactive.

Jay Cooper, an attorney for the Recording Artists’ Coalition, countered that the two sides were still at odds on a number of issues and chastised the RIAA for taking the debate public.

The RIAA reportedly also was rankled by what they saw as unfair treatment at a series of hearings held in the state Senate to discuss industry contracts. In the most recent hearing last month, the org was given limited time to rebut various accusations of contract shenanigans made by artist-witnesses.

The discussions may be further hampered by indications that Love — one of the labels’ most vocal opponents — may be close to settling a breach-of-contract suit with her label, Universal Music. The case had been set to go to court on Tuesday.

Murray said he will try to revive the issue next year and perhaps expand the debate to include contractual issues and healthcare protection for artists as part of a comprehensive legislation aimed at industry-wide reform.

In the meantime, the Senate will continue to hold hearings to discuss accounting practices and other issues affecting the music biz. — including one to be held on Sept. 24.

(The Associated Press contributed to this report.)

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