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THE LEFSETZ LETTER: Family Entertainment And Copyright Act

When are the artists going to wake up and realize the RIAA and the MPAA are NOT ON THEIR SIDE!!

It's utterly amazing. Artists like Don Henley and Sheryl Crow, who won't let anybody mess with their music, who are into the integrity of their projects (or so Sheryl says…) are supporting a heinous organization that is HURTING them, not HELPING THEM!

You think there's no difference who rules in D.C. As a matter of fact, maybe you're a Republican and you're proud. Taxes are lower, those supposed spending Democrats have been harnessed and neutered. But, you must know, the Congress and Administration are artist-unfriendly. Unless you believe G-rated entertainment should rule, and if you work at a major label or major agency or major media outlet you CAN'T, you must know the people in power in D.C. are not on your side.

Now the music and movie industries are afraid of new technology. Kind of amazing if you think about it. If it weren't for new technology, the record business WOULDN'T EXIST! People haven't been purchasing records for all time. As a matter of fact, it's only been about a hundred years that we've been able to record and sell music. Before that all music was performed LIVE! It was EVANESCENT! Why is it that a group of people who have profited by the technological advance that allowed recording on disc and tape should determine the future of music ITSELF?

Yup, that's what the RIAA wants. You must purchase music the way they want you to. They control recorded music. Even though they stole the performance of music from the player piano, they want to make sure nobody else gets passed the baton. Kind of understandable in the heinous all for me none for you society we live in. But I've got to ask, how is this good for MUSICIANS??? Musicians don't only record product. They play live. Sure, they want to make money, but it's Business 101 that the more your wares are exposed, the more you sell. Think of it as ADVERTISING! Then again, in the music business, you don't even pay for this advertising, you GET paid. Via airplay on radio and television and now even the Net. Think about it, the more people who hear your music, the greater the chance you have to BLOW UP! Oh, the independent people know this. This is what they're COUNTING ON! But the chumps who've already entered the major label system don't want to let anybody else in, they want the door SHUT! Kind of amazing if you think about it. Since it's about quality ultimately, and if you're GOOD, it doesn't matter how many competitors you've got, your art triumphs. And, in music, you're not on top forever. Don Henley can't sell a record and neither can Michael Jackson. As for Sheryl Crow, maybe she'll have more plastic surgery and cut a single about the Tour De France, but odds are radio's gonna say next time around she's just too damn old. Oh, don't doubt me, radio and MTV finally did this to AEROSMITH!

So I ask you. How exactly does the major label position benefit artists? It INHERENTLY restricts distribution, when we've established above that greater distribution BENEFITS artists. Instead of constricting distribution, record companies should be badgering technologists to find new ways to get their wares in the hands of MORE people. Figuring, in pure economic terms, the per unit cost will go down, but overall revenue will go UP! And with the cost of distribution so low in the digital sphere, almost all revenue is PROFIT!

But it gets worse. It's not only about distribution, it's about content. The primary concern of an artist is that he be able to express himself unfettered. The labels already have you changing the lyrics for Wal-Mart, as if their hands are tied, as if they all couldn't protest and say it's ANTI-ART! Think about it, every couple of years there's a brouhaha at some museum in New York over the content of some artwork and the artist and museum won't back down, but the LABELS??? They just roll right over.

The Family Entertainment And Copyright Act is primarily about fining people for distributing product before it's released.

Now think about that. Is this a PROBLEM??? SO many people want your product that they're HANKERING for it, spending time on the Web trying to GET IT?? God, that's DEMAND, SATIATE IT! But only in the topsy-turvy entertainment sphere can this be PENALIZED to the tune of a $250,000 fine and five years in prison for the first offense. Think about it, you're better off going to Tower or Best Buy and STEALING TONS OF PRODUCT, the ultimate penalty would be MUCH LESS! I mean make the time fit the crime. What kind of world do we live in where we try to legislate behavior with INSANE penalties. Maybe the BEHAVIOR should be looked at and the law should be modified to fit REALITY!

Talk to labels. When they "have to" break street date because of so-called piracy, i.e. file-trading of unreleased product, they sell MORE, due to the hype, if nothing else. Oh, but there's a MARKETING PLAN! A screwed up one. Now the labels are finally realizing that if a single is on the radio, you should be able to buy it. Yup, the tunes released in advance of albums by WEEKS can now be bought at the iTunes Music Store. Why not sell the ALBUM at this point?? Because you won't have the proper impact the first week of SOUNDSCAN??? This is NUTS! Feed demand. Screw retailer hysteria. In the Net era, everything's INSTANT, what's here today MIGHT be gone tomorrow, so CAPITALIZE! Look at "Time" and "Newsweek". They've had to change their focus from breaking news because of the 24/7 availability of news on the Web. The "Wall Street Journal" just revealed that now, the lifespan of a breaking story is SHORTER THAN EVER! After one day, nobody cares. CHARGE ON THAT DAY!

Furthermore, whenever media companies have shortened distribution windows, they've made more money. You can buy the DVD within three months of theatrical distribution. Why? Because with the tail end of the theatrical frenzy, demand is still HIGH! It won't be long before you can watch the movie in your own home the same day it's released to theatres. And when that day comes, the movie studios' revenues are going to go NUCLEAR!!! Think about it, all that advertising on Thursday, what if you can press a button on your remote and see the movie on FRIDAY??? How many of the 100 million plus households in these United States are going to opt for that, out of sheer EXCITEMENT if nothing else. Let's say ten million. No, let's say it's a BIG MOVIE, a SPIELBERG movie. Okay, at least twenty million households are gonna tune in, at $10 a pop, CHEAPER than going to the theatre if you've got more than one viewer, and the gross for that ONE DAY is going to be $200 MILLION!! And, the studios are not going to have to split half of that with the theatre owner, who will lie about the gross anyway. No, they'll get an accurate count, and with little overhead for the distributor, they'll get MOST OF THE MONEY!!

So, to recap, if you're protecting the release window, you're just leaving money on the table. As far as shooting a movie in a cinema on a camcorder, who the hell would buy the resulting inferior disc if you can watch the movie at home, in pristine condition, from day one!

Oh, technology's gonna make all content owners a GAZILLION dollars. And, it's going to be better for the artists' coffers, since they'll sell SO MUCH MORE PRODUCT! But THIS is what the RIAA and MPAA abhor. The RIAA wants you to still buy the album, or pay an exorbitant price for a single track, keeping revenues at the same shrinking level they are now. It's INSANE!!!

And P2P is unstoppable. You could license P2P, harness it, but the labels want to live in the PAST!

So, the RIAA and MPAA got Congress to roll over and give them what they wanted. Extreme penalties for advance distribution of product.

But they had to give up something in return. Even though the movie business was in COURT, trying to stop the sanitization of their films by third parties, they caved on this point, and allowed it to be LEGAL, just to get the benefits that will actually HURT them, which will IMPEDE progress in distribution and will cost them money.

In case you don't know, the new rage amongst conservatives is removing sex and violence from films to make them palatable for their progeny. In other words, don't expect to see the hypodermic needle scene in "Pulp Fiction". Hell, in time will the original even be AVAILABLE??? Oh, right now the law doesn't allow manufacture of new DVDS, just machines that do the editing for you while you watch, but is it hard to imagine the disappearance of the original version when you can't get an abortion or RU486 in many communities??

Don't you get it? This is the artistic CREDO! This is why people BECOME artists. To execute their VISION! But to save the content companies some perceived/fantasy dollars, this has been sold out.

Marshall Herskovitz IS pissed. But Don Henley and Sheryl Crow are rolling over and doing the RIAA's work for them. Uninformed on the issues, no handlers willing to speak the truth to them, they've become poster children for the wrong side. They've become jokes in the community. Because they're ALL WRONG!

Why do we have to depend solely on Jeff Tweedy. And the indie musicians. Why can't some MAJOR artists come out on the right side. What are they waiting for, the fall of the Berlin Wall to find out communism is OVER? Oh, in a bizarre twist, the RIAA and MPAA state that what the public WANTS is communism, and they're the last bastion of free market capitalism! But I ask you, if they're right, why do we have ASCAP and BMI, pools of money based on licensing? If licensing is anti-American, shouldn't the labels, which own music publishing companies, be lobbying Congress to abolish ASCAP AND BMI???

Don Henley's not going to wake up until it's too late. He could be an agent for change, be doing some good, shaming the RIAA into moving into the future, but it appears he's stuck in Walden Pond, far from a computer, far from the 21st century.

Don, I too was once on the wrong side. But I used P2P and saw the light. Can't you round up the RAC and take a STAND? I mean you're counting on Edgar Bronfman, Jr. and Thomas H. Lee to represent your interests, to do the right thing for YOU?

Come on.

Contact Bob Lefsetz | View Lefsetz Letter Archives

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