Record Companies Should Give Up a Hard Won Right. Here’s Why.

When the recording industry was young there was a genuine concern that it might be strangled at birth by owners of popular songs, who might naturally wish to protect their sheet music sales and public performance fees from competition from the new no-effort and high quality music experience offered by the phonogram. As it was, a sensible deal was struck to allow recordings to be made on payment of a low fee. This payment for the right to make copies of the songs embodied in recordings – the ‘mechanicals’ – became the biggest revenue stream for many of the writers and publishers, and the success of the recordings drove even more revenue through more public performance, and through broadcasting of the very recordings that some had feared would harm the pre-recording music business. This automatic right to perform and record songs became one of the foundations of the industry.

Times change. Great songs still are at the heart of the business; that is fairly uncontroversial. But low production costs and almost no barriers to entry in the digital market have brought a flood of badly performed and badly produced imitations of popular recordings. Artist names and song titles are often created to trick the public that they are getting the real thing. These records might generously be called ‘tributes’, but the tribute is to the earning power not the performance or the art involved in the recording. As a class these records are one of three main drivers of the ballooning inventory that is adding so much cost to the digital music business (the others being PD and ‘generic’ music). The cost in consumer displeasure is harder to quantify, but they add risk to the retail experience and that means a worse business for everyone not playing the ‘full vocal Karaoke’ game.

One response to this problem is certainly for music services to get much better at weeding out the genuinely interesting cover versions from the chancers and soundalikes. This is happening already, but is clearly a difficult, expensive and time consuming activity. They will too need to lose their fear of seeing uncompetitive if they have only the 10 million tracks people will enjoy rather than the 25 million that producers want them to carry.

But there is another approach, far more radical, and I would argue far more in tune with the times. Record companies should willingly give up their automatic right to make copies of the embodied song when they sell records. The right to perform need not be touched; the right to record for private and personal use can remain too. But making copies of the composition for the sale or performance of sound recordings would benefit greatly from reverting to exclusivity and private negotiation.

The question for the owner of the song would then become not how many copies can be tricked out of an undefended public, but whether a particular recording adds real value to the song itself, now and in the future. Record companies too will perhaps pay more, but for an exclusivity in their own asset, the recording, that should pay them back many times over in the market.

The contention here is that every horrendous cover of Born in the USA is a cost borne ultimately by the owners of the copyrights therein, and unfairly benefits free-riders on the value created by the writers and producers of the song and original recording. Digital markets sometimes need new approaches to copyright; in this instance what might seem a retrograde or undemocratic move would serve the public and the music industry better than the current free for all.


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