Internet Distribution – Artist Beware
Volume C, No. 4April, 2000
They act like they are the artist’s best friend. They portray the traditional record companies as the enemy. They claim that the internet is the great equalizer. They say, “Distribute your music through our web site and millions of people all over the world will be able to download your music. The opportunities are endless.”
Who are they? The internet distribution companies. Are the opportunities endless? Yes – the opportunities for them to make money from your music are endless, and the opportunities for you to get hurt are also endless.
I was optimistic about the potential of the internet and was looking forward to signing on with internet distributors as a way to sell my music to the public. I had gone to some interactive music conventions and was excited by the pitches of internet entrepreneurs. They used words like “non-exclusive” and “50:50 split.” It all seemed so easy, and I was feeling quite happy . . . until I spoke to a lawyer. Afterwards, I felt like I had been saved from jumping into a snake pit.
The sad reality is that the internet is a breeding ground for a new generation of greedy, manipulative business people who take advantage of trusting musicians. In a way, they are worse than the record companies – because at least with the record companies, you know they’re out to take advantage of you. These people speak soothing words and then take even more advantage of you. Let’s look at some examples.
- One prominent internet distributor offers a contract with the following sentence: “You grant us throughout the territory and during the sales period the non-exclusive right to sell . . . your recordings”. That sounds fine, doesn’t it? I thought so, too – until my lawyer pointed out that they define “sales period” as forever and “territory” as the universe. In other words, they want the right to sell your CD for the rest of your life and beyond.
- They also say, “You agree to furnish us with your CDs promptly upon our request.” This also sounds reasonable, until you realize that there is no end to this responsibility. You could be retired and living on Social Security and yet you are still responsible to supply them with your CDs, at your expense. Now, you may think that that’s not so bad because you’ll be making money – but think again. Although the contract states that you are entitled to a percentage of the sales, it also states that they can deduct “any costs related to those sales.”
What does that mean? Suppose they take a trip to Hawaii to make a “business” contact, isn’t that a cost “related to those sales”? If they also soak up some sun, I guess that’s just part of the cost of doing business.
- They also reserve the right to “assign” the agreement to anyone they choose, so you may become responsible to someone you never dreamed you would do business with. Of course, you can’t assign the agreement. On top of this, you also agree to indemnify and defend them from any legal action arising out of any claim by any third party concerning any breach of the agreement by you. Scary stuff, isn’t it?
- I have seen contracts that look perfectly benign . . . except for this one little clause called “Modification.” One contract states, “We may amend any of the terms and conditions in this agreement at any time solely at our discretion.” Furthermore, they will e-mail any changes and unless you respond within five days you accept the change. What if the change is, “You give us the rights to the copyrights on all the music on your CD”?!
If you sign this contract you’d better hope that you never get into a situation where you can’t check your e-mail every five days. You’d better not have any medical emergencies, and don’t even think of a six-day hike unless you have a portable non-electric internet hookup device (that’s unbreakable). I’ve even seen a contract that said they can make modifications at any time and it is your responsibility to check their site. If three days pass after a change and you don’t notify them by U.S. mail, you accept the change!
I’m sorry to be the messenger of bad tidings but I hope this will wake up my fellow musicians to the dangers of internet distribution. Perhaps I will write another column offering solutions. In the meantime, if you have had any internet distribution experiences that you would like to share (pro or con) please e-mail me at firstname.lastname@example.org. All responses will be held confidential. While you’re at it, feel free to check out my site at www.voncello.com. Don’t give up, but remember: buyer beware!