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The Real Music War Begins: Terry McBride's Nettwerk Music Group Takes On The RIAA & Bob Lefsetz Responds

NEW YORK, NY (CelebrityAccess MediaWire) — Canadian-based artist label and management company Nettwerk Music Group has joined the fight against the RIAA on behalf of consumers who wish to download music.

In August 2005, the Recording Industry Association of America (RIAA) filed a complaint against David Greubel for alleged file sharing. Greubel is accused of having 600 suspected music files on the family computer. The RIAA is targeting nine specific songs, including "Sk8er Boi" by Arista artist Avril Lavigne, a Nettwerk management client. The RIAA has demanded Greubel pay a $9,000 stipulated judgment as a penalty; though it will accept $4,500 should Greubel pay the amount within a specific period of time.

"Suing music fans is not the solution, it's the problem," stated Terry McBride, C.E.O of Nettwerk Music Group.

Nettwerk became involved in the battle against the RIAA after 15-year-old Elisa Greubel contacted MC Lars, also a Nettwerk management client, to say that she identified with "Download This Song," a track from the artist's latest release. In an e-mail to the artist's web-site, she wrote, "My family is one of many seemingly randomly chosen families to be sued by the RIAA. No fun. You can't fight them, trying could possibly cost us millions. The line 'they sue little kids downloading hit songs,' basically sums a lot of the whole thing up. I'm not saying it is right to download but the whole lawsuit business is a tad bit outrageous."

Chicago-based Mudd Law Offices will take on the legal battle. Charles Lee Mudd Jr. has represented individuals subpoenaed and sued by the RIAA since the suits began in late summer 2003.

Mudd stated, "In an effort to combat the continued injustice of the RIAA's consumer lawsuits, attorneys, musicians and artist managers have joined forces to defend the interests of David Greubel and his family in the United States District Court, Northern District of Texas. Together, these parties hope to demonstrate the injustice and impropriety of the RIAA Litigation Initiative." Joining the litigation team will be Scott Lundhagen, an associate with Mudd Law Offices, and as local counsel, John G. Browning of Browning & Fleishman, P.C., Dallas, Texas.

The RIAA has issued more than 1,000 subpoenas to various Internet Service Providers (ISPs). These ISPs include commercial, academic, and private providers of internet service.

"Since 2003 the RIAA has continually misused the court and legal system, engaging in misguided litigation tactics for the purpose of extorting settlement amounts from everyday people — parents, students, doctors, and general consumers of music," Mudd stated. "In doing so, the RIAA has misapplied existing copyright law and improperly employed its protections not as a shield, but as a sword. Many of the individuals targeted by the RIAA are not the 'thieves' the RIAA has made them out to be. Moreover, individual defendants typically do not have the resources to mount a full-fledged defensive campaign to demonstrate the injustice of the RIAA's actions. Today we are fortunate that principled artists and a management company, Nettwerk Music Group, have joined the effort to deter the RIAA from aggressive tactics — tactics that have failed to accomplish even the RIAA's goals."

Nettwerk Music Group has agreed to pay the total expense of all legal fees as well as any fines should the family lose the case against the RIAA.

"Litigation is not 'artist development.' Litigation is a deterrent to creativity and passion and it is hurting the business I love," insists McBride. "The current actions of the RIAA are not in my artists' best interests."

"My family owes a huge debt of gratitude to Mr. Terry McBride and his company and artists they represent," said Greubel. "Further, every music fan, every citizen owes him gratitude for his courage to stand up and say, 'This is not right!' Anyone who has been involved in the legal system knows the feeling of being forced into a position they do not believe in, simply because they did not have the resources to have their day in court. Mr. McBride has stood up, and again said, 'This is not right!' Thank God for people like him."

The RIAA defines itself as "the trade group that represents the U.S. recording industry" and its mission statement includes, "to foster a business and legal climate that supports and promotes our members" creative and financial vitality. Its members are the record companies that comprise the most vibrant national music industry in the world. In support of this mission, the RIAA works to protect intellectual property rights worldwide and the First Amendment rights of artists; conduct consumer industry and technical research; and monitor and review state and federal laws, regulations and policies."

Nettwerk Music Group is Canada's leading privately owned record label and artist management company, responsible for managing some of North America's biggest artists such as Sarah McLachlan, Avril Lavigne and many others. Nettwerk has several offices located around the world including New York, Los Angeles, Boston, Nashville and London. Its home office is in Vancouver, B.C. –Bob Grossweiner and Jane Cohen

The Beginning Of The End

Bob Lefsetz Responds

Terry McBride is not stupid. In fact, he's one of the smartest and shrewdest operators in the business. You can argue with his methods, stating he burns his artists out in the process of breaking them. But really, don't you have to give props to someone who turned the Barenaked Ladies, the world's least sexy and least charismatic rock group, into an arena act?

If Terry McBride and his Nettwerk operation were located south of the border, the "New York Times" would have done a story on them, Terry would be a national hero, not quite as impressive and lionized as Steve Jobs, but respected and viewed as a role model by the younger generation.

Nettwerk manages such international superstars as Sarah McLachlan, Avril Lavigne and Dido. Along with middle tier acts like the aforementioned Barenaked Ladies, Sum 41 and Jars of Clay. And DEVELOPING acts like Brand New. Isn't this JUST the kind of guy who should be lining up behind Mitch Bainwol and the RIAA? I mean Terry McBride is IN BED with the major labels. Doesn't Nettwerk function as the A&R for Sony BMG in Canada now??

But Terry McBride is drawing the line. Because Terry McBride knows it's about fans, and careers, and what the RIAA is doing is eviscerating both.

We've been waiting for this war between the managers and the labels FOREVER! We've been waiting for a backlash against Metallica versus Napster. And now we have it.

Metallica wasn't wholly wrong. The original Napster put forth the notion that what it was doing was legal. Hogwash. Anyone with a Bar Card knew better (and isn't it funny that Napster was run by lawyers…) We needed a lawsuit to establish that the copyrightholders had rights, that you needed a LICENSE to utilize their material. But those of us who actually used Napster, who were ecstatic over the advantages of such a service, advantages which ultimately resulted in the worldwide phenomenon of the iPod, were under the illusion that once the major labels got their rights reinforced, established, laid down, they'd go forth AND license.

Turned out nothing could be further from the truth.

The major label cartel, which never used Napster, which bans P2P software on all its computers, putting its head in the sand like an ostrich, not wanting to see the future, is hurting Terry McBride's business. And he doesn't LIKE IT!

He tried to be a good soldier. But his responsibility is to his acts, not his corporate brethren, and what he sees is his acts' fans being PENALIZED for their fandom. Hell, it's HARD ENOUGH to break an act, you don't want the people paying attention SCARED AWAY!

But that's what the major labels are doing. Sales show it. And the iTunes Music Store is more of a ruse than a replacement business.

Terry McBride turns out to be a real rock and roller. Not a namby-pamby who's changing his lyrics for Wal-Mart and doing whatever his label says to pump up sales of his record. In rock and roll, it's what you STAND FOR that's important. (Very different from hip-hop. Where the FRUITS of the labor are the most important thing…the bitches and ho's, the ice and the iron.)

Terry's been trying new things. Not that they get much press in the States, but he's innovative in a way that the major labels are not. He's TRYING! And the labels are getting in his way.

So Terry drew a line in the sand.

That fiasco in the French legislature? Where penalties for traders turned into a proposed law for licensing trading? That was just the beginning.

This is a good story. It's kind of like the Mob going to the mattresses. People LOVE IT when families fight.

The family is now in a fight. There's now a crack in the RIAA facade. The one that says the only way out is to sue traders, and that they're doing this SUCCESSFULLY, i.e., they're reducing P2P trades.

This was an issue waiting to flare up. While the RIAA maneuvered behind the scenes, the public consciousness moved on. Which the RIAA thought was good for them. Of course, this is untrue. Since, in the heyday of Napster, when EVERYBODY was talking about music and trading same, CD sales were at their ABSOLUTE HIGHEST! But, despite it not being a topic of everyday conversation, people were still trading, more than ever. It was an underground movement. Waiting for an ignition point.

Houston, we've got ignition.

Terry McBride, a true music business insider, one with JUICE, has now raised the question… Is the RIAA's strategy RIGHT?

But it's more than that.

Is the RIAA's strategy JUST? Is it GOOD for music? Good for ACTS? Good for FANS?

Terry McBride thinks not.

And he's not alone. He's got the public on his side.

As for the rest of the wimpy managers and acts… When will they see that the major labels ARE NOT ON THEIR SIDE! That they're in the business of careers, and the more people who possess their music, by acquiring it cheaply via licensed P2P, the better it is FOR THEM?

It appears a hundred year war.

But it's worth fighting. For make no mistake, mass distribution of music via the Net, so EVERYBODY is a music consumer, has music on his hard drive, is not only good for music, it's good for the MUSIC BUSINESS!

Contact Bob Lefsetz | View Lefsetz Letter Archives

NOTE: The views expressed in this editorial do not necessarily reflect the opinion of CelebrityAccess, Encore or its employees.