Hip-Hop Fridays: Finding A Common Ground In Music Industry Challenges By Hilary B. Rosen, President & CEO, RIAA

Everyone is talking about the troubles in the music business. What's up with our consumers? What do we do about piracy? What's with the disputes with artists? Can we recapture our exploding global growth?

Let's look at some of the issues.

A recent RIAA survey gave us some insight into the current attitudes of the active music consumer. Music fans are as passionate as ever about music. 34% of our best customers say that they are buying less music than they did before because they can get what they want for free by downloading or copying on a CD recorder. But 23% of them said they want to buy more but don't know what to buy. That's an opportunity. We've got to work differently to educate fans about new music. We'll invest more money in direct advertising and look for more creative outlets. Spending all of our money to buy listening stations in retail stores and independent promotion for radio is no longer working the way it once did.

Artists have played a role in the rising consumer cynicism about buying music. It used to be cool for an artist to publicly carp about record companies. Now all it serves to do is convince music fans that they don't need to buy. That doesn't help anyone's interest.

Many artists have legitimate beefs with their record companies. A group of successful featured artists have organized into the Recording Artists Coalition (RAC). RAC is being funded by a stellar group of concerts this week in Los Angeles. One of the priorities of RAC is to push for legislation in Sacramento that would allow artists to break recording contacts after seven years with no consequences. There is no excuse for a record label not to live up to contractual promises in accounting or anything else. That philosophy works two ways. I don't think that total repeal of the damages provision of the "seven-year" law is fair - people should have to live up to their agreements.

But I know there is room for common ground on the issue and the companies I represent are committed to working with RAC to find the right compromise.

In so many ways we are a family business. Sometimes when the tape is played back and I watch many within the music community talk about ourselves in front of strangers, I think of my mother stage whispering through clenched teeth, "Sshhh, people are watching; they don't know we're family."

I've been afraid lately that the squabbling over the relatively small picture where artists and labels disagree threatens to make us lose sight of the big picture - how much our industry remains under attack, and how the artists and labels' mutual efforts to continue providing and promoting the music you love is the story of our unity. We are not the first family to fight publicly about money, and we won't be the last. But the context in which we scrap is that of a very strong set of relationships and mutual interests. Our family needs to tell that part better.

Artists create, and labels support that, artistically and financially. We invest in each other, from our pockets and our hearts. We together work our tails off - engineers, A & R people, marketing, promotion managers and musicians -- the whole family - to get that master disc finished, pressed or downloaded digitally, and into the stores or online. And then, on opening night, we all sit in the front row and cross our fingers together: in this hit-driven world, is this the one?

I am glad that featured artists are finally organizing. Those of us who work on policy issues could use the help. It was lonely for Dr Dre and Metallica to be with us out there on Napster without the vocal support of other artists. Napster may have gone legit but it has been replaced by services that are still offering over 3 billion unauthorized songs a month .

It has been tough getting royalties out of broadcasters and webcasters without featured artist support.

Threats by Congress to limit copyright protection are real. Powerful broadcasters will fight our attempts to set fair policy for independent promotion. So, at the great concerts put on by the Recording Artists Coalition this week, don't be shocked if somewhere in the aisles there are label executives enjoying every minute of the show (except those when they might be trashed from the stage!).

Because that is why we are all in this business. For the music. The Recording Artists Coalition has an important role to play. I know we will fight, sometimes too loudly, and we'll come to a resolution, and then there'll be something else. But the constant fact is that we share a common purpose: to promote artists and those who that invest in their development.

So while the imminent demise of the music industry is prematurely predicted in cynical circles, those of us who love music, and know that there are passionate fans out there, will keep working together. The signs are challenging but hopeful.

We are succeeding in new artist development 20% of the Billboard Top 200 album sales chart is occupied by new and developing artists today. We've supported the launch of several new business models and subscriptions services to bring our online music fans back to the legitimate business. We are reaching beyond traditional outlets to market new music. We are setting good legal precedents to protect our rights here and abroad. We are experimenting with consumer-friendly self-help protection technologies.

Our government knows this industry is a vital economic participant in a favorable balance of trade and is working globally to protect us. This is still, and for a long time will be, a business that is good and does good.

By Hilary B. Rosen, President & CEO, Recording Industry Association Of America

February 26, 2002

Friday, March 1, 2002