With the recording industry already reeling from plummeting sales, termination rights claims could be another serious financial blow. Sales plunged from $14.6 billion to about $6.3 billion over the decade ending in 2009, in large part because of unauthorized downloading of music on the Internet. This has affected new releases especially, which has left record labels disproportionately dependent on sales of older recordings in their catalogs.
“This is a life-threatening change for them, the legal equivalent of Internet technology,” said Kenneth J. Abdo, a lawyer who leads a termination rights working group for the National Academy of Recording Arts and Sciences and has filed claims for some of his clients, who include Kool and the Gang. As a result the four major record companies — Universal, Sony BMG, EMI and Warner — have made it clear that they will not relinquish recordings they consider their property without a fight.
“We believe the termination right doesn’t apply to most sound recordings,” said Steven Marks, general counsel for the Recording Industry Association of America, a lobbying group in Washington that represents the interests of record labels. As the record companies see it, the master recordings belong to them in perpetuity, rather than to the artists who wrote and recorded the songs, because, the labels argue, the records are “works for hire,” compilations created not by independent performers but by musicians who are, in essence, their employees. Here again, greed rules the music industry!