Recording Artists Wage War
of Independence

They fight to dump the RIAA

Don Henley played drums on the most popular album of all time -- Eagles: Their Greatest Hits, 1971-1975, which has sold more than 27 million copies since its release in '76.

He's the epitome of a successful rock star, an icon of the age -- the '70s -- when musicians ruled the world from the mansions that dot the California mountains. And his fame endures: He just finished a solo U.S. tour and the Eagles plan to record an album next year. But these days Henley's filling the pages of Rolling Stone for another reason. For the March 14 issue, he contributed an article about the ways in which he says record companies rip off artists, and why he, Sheryl Crow, the Dixie Chicks and others have formed the Recording Artists Coalition (RAC).

That organization is now squaring off in Washington and other corridors of power against the powerful Recording Industry Association of America (RIAA) in what is emerging as the most serious labor-relations dispute in the more-than-100-year history of the record industry. Artists are battling their labels for simpler contracts, the right to own their work and the right not to be tied to one label, as well as such benefits as healthcare. The timing couldn't be better -- or worse, depending on whom you ask. The industry is dealing with its largest sales slump in 18 years, with corporate leaders placing much of the blame for the resulting layoffs on Internet file-sharing and CD burning.

They are fighting by collectivizing -- along with the RAC, Courtney Love is leading the charge for a union -- and through the courts: Love and the Dixie Chicks are both in heated battles with their record labels that could set new precedents for musicians' rights.

''It's like we're on the Titanic, the iceberg's been spotted, and everyone's still arguing over who gets the state room,'' Miles Copeland, manager of Sting and head of Ark 21 Records, said at the recent South by Southwest music conference in Austin.

Henley's not merely organizing the artists. He's also threatening to play the technology card the labels intensely fear.

''The Eagles hope to be able to use the Internet to market our forthcoming album,'' says Henley, whose last release was on the Warner Bros. label. "Not exclusively, but as part of a marketing plan. We may not go with a major label at all.''

Henley says he has no qualms about piggy-backing on the consumer revolt that is music downloading.

''They won't listen to us when times are good,'' Henley says of the labels. "Then, we wouldn't have a chance.''

It's unclear whether they're listening now. RIAA President Hillary Rosen says one thing artists can expect from record companies are more pink slips -- like the $28 million one Mariah Carey just received from Virgin, who dropped her after one unsuccessful album.

SEVERING TIES

''We're in a period of correction. Companies are going to be in a retrenched mode for the next few years,'' Rosen says.

But more artists may be saying good riddance to the multinational conglomerates that account for 80 percent of CD sales. Such one-time top-sellers as Prince, David Bowie and Jimmy Buffett are already striking out on their own.

The thought of rock stars peddling their wares themselves has a brave-new-world look to it, but the changes could benefit the consumer. Smaller companies are likely to step into the breach left by the majors, offering more choices and less hype. For instance, Rough Trade, an esteemed '80s indie, reemerged last year and promptly scored a huge UK hit with the New York band the Strokes.

''The upside is there are lots of cool indie labels that are getting bigger and stronger,'' says Vickie Starr, co-owner of the Girlie Action publicity and marketing company.

Although indies traditionally offer less up front, artists can get a larger percentage of money raised through record sales. Rough Trade splits royalties 50-50 with its acts, as opposed to major labels, which typically offer from 10 to 20 percent -- and then charge all sorts of marketing and promotional costs back to the artist.

''Ours is a socialist model, without the Stalinist tendencies,'' Rough Trade founder Geoff Travis says.

But Rough Trade is almost as famous for its spectacular flameout in the early '90s, when it declared bankruptcy, as for the acts Travis discovered (including the Smiths, the Fall and Lucinda Williams).

INDIE TROUBLES

Travis blames Rough Trade's earlier demise on mismanagement. This time, the label's back office will be run by Sanctuary, a well-respected management and recording company best known for its metal acts. Still, many observers worry whether indies have the wherewithal to support and market artists. ''Indie labels still have trouble financing,'' Starr says. One major independent distributor, DNA, declared bankruptcy last year. Another, Caroline, was purchased by troubled EMI. A third, Alternative Distribution Alliance, is also owned by a major in the throes of reorganization. Even a respected industry veteran such as Island and Palm Pictures founder Chris Blackwell confirms that investors are justifiably wary of major labels. But he predicts that will change as investors look for companies with product more tangible than cyberspace.

''The planet is starting to change a bit from what it was two or three years ago,'' Blackwell says. "Back then, somebody would invest a dollar and turn around and get $10. Everybody wanted a very fast, huge return. Now that it's in much more of a deflationary mode, people are more interested in something which is designed to be more salable.''

Many artists thought the Internet would allow them to make end runs around the majors and cut out the middlemen of distributors and the media. After his revolt from Warner Bros. -- before the label let him out of his contract, he ran around with the word ''slave'' painted on his face -- Prince has tried to release his albums online, and seen his sales drop precipitously. But Washington musician Jenny Toomey, founder of the Future of Music Coalition, which helps independent artists and companies sort through emerging technology, says she is encouraged by how the powerful artists of the RAC are entering the debate.

''One of the main reasons we formed the coalition was we wanted to make sure that the companies that controlled the terrestrial world, the five majors and the broadcasters, wouldn't be allowed to determine what the new models looked like on the Web,'' Toomey says.

Big labels are flexing their muscles on the Web more and more, Toomey says. For example, proposed legislation would allow labels to collect royalties from Internet radio broadcasts -- something they don't get from conventional broadcasts.

''The majors have been leveraging their power and aggregated copyright to make sure laws are passed and precedents are set to make sure their business models are protected,'' she says.

BACK TO THE STAGE

Along with new technology, musicians may also find themselves relying on old skills. At South by Southwest, people on both sides of the debate emphasized the importance of musicians taking part in all aspects of their careers, from merchandising to performance. Which is why, after an era in which videos shaped the direction of pop, live music may be staging a comeback.

''Performing is your lifeboat,'' Buffett says.

"If you develop yourself as a good performer and make that contact with an audience, no matter what happens with the record business, you should [be OK.]''