June 2003

Record Labels, Artists

On April 22 2003, the U.S. District Court based in Los Angeles, dealt a blow to BMG and Sony, deciding that record clubs owned by the two majors had to face a court action scheduled for January 2004.
The court found that the record clubs failed to pay for mechanical licenses on the premium records given away (roughly 6-8 cents per song, per copy sold). Songwriters’ lawyers estimate that the record clubs failed to account for approximately $100 million dollars a year.

The following comment is from respected industry author – Moses Avalon, in his latest e-newsletter Moses Supposes. His site can be found at It is an interesting attack on what might be seen as the hypocritical attitude of the labels in pursuing P2P file sharers and yet at the same time maintaining archaic and unfair accounting and trade practices. The Recording Artists’ Coalition have made similar comments (see Law Updates March 2003 and
“All this makes you wonder why the RIAA (which is funded by companies who own both major publishing houses and record clubs) scream bloody hell over KazaA and Napster, and yet ignore this? Could it be to distract us from the fact that their constituents were actively involved in collusion that was costing artists and songwriters far more than the file-sharing services? Or were they just jealous that file sharing services were ripping off their artists better than the majors were. Glass houses, people. Glass houses.” [Moses Avalon]

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