USA: U.S MUSIC INDUSTRY SAY THERE'S NOT MUCH TO CELEBRATE AHEAD OF ANNUAL GRAMMY MUSIC AWARD CEREMONY

Record ID: 392582

  • Title: USA: U.S MUSIC INDUSTRY SAY THERE'S NOT MUCH TO CELEBRATE AHEAD OF ANNUAL GRAMMY MUSIC AWARD CEREMONY
  • Date: 25th February 2002
  • Summary: LOS ANGELES, CALIFORNIA, UNITED STATES (FEBRUARY 26, 2002) (REUTERS) MILES COPELAND, RECORD LABEL OWNER (1.03) SOUNDBITE (English) COPELAND SAYING: "You know, labels are closing right, left, and centre; people getting fired, reductions; EMI announced a profit warning; 950 million (USD) fell off the share value; they fired the head of the company; they're closing Virgin h
  • Embargoed: 12th March 2002 12:00
  • Keywords:
  • Location: LOS ANGELES AND SACRAMENTO, CALIFORNIA AND NEW YORK, NEW YORK, UNITED STATES AND VARIOUS FILM LOCATIONS
  • Country: USA
  • Topics: Business,Entertainment,General,Economy
  • Reuters ID: LVA7NRHUZLTZW8C07ZX0ISURBFU1
  • Story Text: Amid the hype and celebration leading up to the Grammys, music industry insiders are saying there's not much to celebrate -- record sales are off between 10 and 20 per cent for some labels and record companies are suffering the effects of the online "blackmarket" music trade. Meanwhile, the artists themselves say they're suffering too and, led by the likes of Sheryl Crow, Don Henley, and Courtney Love, they're fighting the record labels for a bigger piece of the profits and for more freedom in their contracts.
    As the music industry rolls out the red carpet for Wednesday's (February 27) Grammy Awards, news headlines about the state of the industry have been less than celebratory, saying record sales are down 4 per cent overall from a year ago. That's the biggest drop in a decade and especially significant because sales of blank CDs eclipsed even the most popular music acts and burning music seems to be more in vogue than buying music. Record executives say they are being crushed by a combination of spiralling marketing and radio promotion costs, online piracy and economic sluggishness.
    Any way you look at it, it's a bleak situation, according to Miles Copeland, who once fronted record label IRS, home to 80's superstars The Police and the Go-Go's. "You know, labels are closing right, left, and centre; people getting fired, reductions; EMI announced a profit warning; 950 million fell off the share value; they fired the head of the company; they're closing Virgin here, moving it to New York; they just closed Priority Records. I can just run down the list." Copeland is now part of a group called the California Music Coalition which is working to keep recording industry jobs in the state.
    Hilary Rosen, President of the Recording Industry Association of America (RIAA), the lobbying arm for the major labels, paints a more optimistic picture. "The doom and gloom is clearly being overdone, this is an industry that is still providing fans with what they want which is great music. There are some issues in this business but I am optimistic because music too important in everybody's lives."
    Label heads, recording artists and consumers all agree on one thing: the industry is at a major turning point, much like one a generation ago, when CD's overtook tape formats.
    George Nichols, an entertainment industry analyst for Morningstar, says the future looks bleak unless the major labels can keep up with the technology.
    "Recording industries are going to have to cope with the change from CD's to digital music. And if they don't, then indeed, the future will look even worse."
    RIAA officials cited online piracy and CD-burning as a major factor in the drop-off of sales. Recent RIAA surveys of music fans 12 to 54 years old found that 23 percent said they didn't buy more music last year because they downloaded or copied most of their music for free.
    In addition, 50 percent of those who have downloaded music for free said they had made copies of it, up from 13 percent two years ago.
    Miles Copeland, who now owns and operates ARK 21, an independent record label, sees the need for a consensus approach.
    "The issues that need to be addressed about technology really do require everybody getting together. The labels can't because there's antitrust, if they all get in a room, there's antitrust issues and the artists have got themselves diverted into thinking that the record company's the enemy."
    Several angry stars have grabbed hold of the stand-off, spotlighting it with fund-raisers for a crusade against what they say is unfair record company control of an artist's career.
    The "Concerts for Artist Rights," will feature performances by stars like Don Henley, Billy Joel and Sheryl Crow on Tuesday (February 26), the eve of the Grammys.
    These artists have formed a group called the Recording Artist Coalition to lobby the US Congress and state legislatures for major changes in the record industry's ability to tie musicians to often low-paying long term contracts. In late January, they lobbied the California state legislature. "I'm 54 years old; I'm probably in the twilight of my career, I have two albums left on my contract so it really doesn't affect me at all," former Eagles frontman Don Henley told the politicians, "but I have three children who might want to be in this business some day and I don't want to see them treated the way I've seen lots of my colleagues treated in this industry."
    Henley who has led the group since its inception, got wise to the political route after noticing industry bigwigs' huge lobbying presence in Washington. "We simply want a place at the table," he says.
    Saying they are pushing for new legislation that would free artists from what they say is "indentured servitude" to record labels, the group wants to repeal a law that allows record labels to keep artists tied to contracts longer than talent in other sectors. This, along with the industry's accounting practices to hide company profits and short-change the performers on royalties has led Hole frontwoman and widow of Kurt Cobain, Courtney Love to call the business tactics of the record companies "unconscionable and unlawful."
    Reeling from the worst year in album sales in 10 years, the record labels have described the group as spoiled malcontents.
    "There is a bit of a family feud going on right now with some very successful artists, unfortunately successful artists forget that the system once took a chance on them," says the RIAA's Rosen.
    On Grammy night, of course, once the show starts and the first act appears, the audience and the stars will most likely put aside their differences and just . . . listen.
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