New PKThinks White Paper: Rewind, Reclaim: Copyright Termination and the Music BusinessMarch 12, 2014
The copyright reclamation right gives artists the ability to tear up their copyright transfers or licenses after 35 years. This right has the potential to transform the recorded music business. Since this right just recently became effective in 2013, it still remains to be seen exactly what ripples or shock waves the reclamation right will send through the music industry. As we watch how the reclamation right unfolds in practices, PKThinks has put out a new white paper unpacking how this right will operate in the context of the recorded music business.
For decades, some record labels have used their copyright holdings as leverage to become industry gatekeepers against artists and consumers alike, and to burden the development of new distribution platforms that threaten to make them obsolete. This problem has only been exacerbated by years of consolidation among the major record labels that has led to the three largest labels controlling 88% of the recorded music market by distribution. As a result, the development of innovative new services that promise to benefit both musicians and consumers has been stifled, and the largest incumbent rightsholders continue to dominate the market.
The Rewind, Reclaim white paper explains how many labels (especially major labels) have also used their leverage to negotiate one-sided record deals with less powerful musicians that burden artists with years of debt (or perpetual debt) and place control over much of the artist’s career in the hands of the label. Even where artists have not been exploited due to their low bargaining power, it is difficult for anyone to accurately gauge the market value of an album before it reaches the market and the artist’s career has matured.
The reclamation right now gives artists the opportunity to reclaim their rights to gain control over their own life’s work, or to renegotiate better deals with their current business partners. Of course, there are many ways a record label or other intermediary could try to prevent artists from reclaiming their rights, so Congress, musicians, and music fans must all be vigilant to make sure unanticipated pitfalls don't prevent artists from exercising their reclamation rights.
The history and power imbalance in today’s recorded music industry make it ripe for reform through the reclamation right. If all goes as Congress intended, the reclamation right will lead to a more competitive, accountable ecosystem of music business intermediaries, which benefits musicians and their fans alike.