Laz wrote:I love the old chestnut - "These are work-for-hire." But the expenses are charged to the artist and royalties have been paid for many years. I may have it wrong, but I thought these were clearly separate - either it's work-for-hire and you get paid a set fee, or it's a copyrighted creation and you get royalties.
I think it's a bit more complicated than that.
There's no question that the artist can reclaim the
song, but the masters aren't the song - they're a
recording of the song. As I understand the RIAA's arguments, they hinge on the argument that the recording is more than the artist and the song - it's a collaborative effort that includes the work of those hired directly by the studio: studio musicians, producers, recording engineers, mastering staff, etc.
The money side of things isn't the slam dunk you might think. Some artists may argue that it can't be a work for hire, because their royalties were reduced to cover all expenses. The labels will simply trot out five or ten times as many artists with identically structured contracts who
didn't sell enough copies to cover their advance, and offer that as proof that the recording itself is for-hire.
The distinction between an employee (who creates works for hire) and a contracted partner (who shares in and/or retains ownership of their work) is very, very gray. I think the labels have a very strong argument: a contract partner is a business entity, so their capital is at risk in a project; an employee is always paid for their labor, and never has their capital at risk. Artist contracts never require repayment of an advance unless the contract is breached.
It's often unfortunate, but law isn't based on principle; it's based on procedure, and very narrow questions. Labels regularly sign an artist and have second thoughts - there are thousand of albums that were recorded and never released. There are tens of thousands of more cases where artists created a work that didn't sell enough to hit the accounting break-even. In all of those cases the artist kept the advance. The question will not be whether Springsteen or the Rolling Stones ended up paying for all their production costs; the question will be whether the label had a guarantee of recovering costs - even in the case of superstars, there's no guarantee that the next album will be a hit.
Like most legal issues, a court will ultimately use a basic question like this to decide the "winner". And like most legal issues, the real winner will be the lawyers. I predict tens of thousands of billable hours on this one.
by Laz » August 15th, 2011, 6:31 am 
