Performing artists not seeing money from file sharing settlements

By Tim Conneally, BetaNews

February 29, 2008, 11:56 AM

In the last few years, major record labels have issued dozens of lawsuits against sites distributing audio and video files of their property. Artists' representatives are now saying the settlement money isn't going where it belongs.

Of the suits that have been settled, Napster agreed to pay out $270 million, and Kazaa acquiesced to paying $115 million from a case launched in 2004, compensating for past infringements, and converting to a legal download business offering licensed music. Universal Music Group, who went up against Grouper and Myspace for copyright infringement, inked a settlement from online video site Bolt.com.

That company had to sell itself for $30 million to GoFish just to pay off its debt to Universal.

Warner Music, who has been struggling to keep up with declining profits, recently sued music search engine SeeqPod, but a deal has not yet been reached. Such is the state of both Warner Music and the major label at large. Warner Music's CEO lamented on the industry's inability to handle the change to a digital music marketplace.

But in an even worse position than the labels are the artists signed to them. Industry insiders told the New York Post that the record companies are still determining how to distribute the money made from these settlements. After legal expenses, it is entirely possible that there wouldn't be enough money to go around to pay all the artists whose work was shared.

Even if there was, however, talent managers and the artists they represent would have to fight just for a small piece, as the music industry has a reputation of being tight-fisted.

Several years ago, an essay entitled The Problem With Music was penned by musician, record producer and perennial cynic Steve Albini. It gives a detailed account of just how little major label artists made in comparison to other parties involved in the music trade.

Artists' lawyers typically made four times more than an individual band member, and a producer could make as much as twenty times what the artist made for the same product.