Sony to re-sign artists in bid for full online rights

Sony Music is to add full online rights to artists' recording contracts, paving the way for a major effort to exploit the Internet as a method of not only selling but distributing music. According to today's Financial Times, Sony has instructed its own record labels, which included Columbia, Epic and Sony Classical, plus affiliates, such as Creation Records, Oasis' label, to ensure a comprehensive range of online rights are included in recording contracts. The news comes a week after Creation announced it will begin distributing its artists' music digitally next year (see Oasis' record label plans pay-per-download music sales). Sony's instructions apply not to all future signings, but to artists currently on labels' rosters. Contracts with the likes of Michael Jackson, Bruce Springsteen, Celine Dion and Mariah Carey will have to be renegotiated. To be included in the new contracts are not only online music sales rights -- which many labels now include in contracts, to cover sales of CDs and tapes via the Net -- but digital distribution rights and comprehensive online marketing rights, including artists' own Web site domain names. Sony's move is clearly a power play. Digital music sales are fairly small fry, and even the most enthusiastic estimates suggest digital sales will account for only 20 per cent of all music sales by 2007. From a distribution rights perspective, Sony is simply covering an angle, much in the way film and TV companies began to add commercial video exploitation rights to production contracts. More important the marketing arrangements, which put control of promotion into the label's hands, ensuring that artists' Web sites are accessed through Sony's own, and giving it the opportunity to cross-promote artists in similar musical genres. The Internet has been widely heralded as a mechanism for putting control of sales into the hands of the music makers, and few bands have ignored the possibility if offers for promotional activities, typically conducted through official fan club sites. The Internet Underground Music Association recently announced the Net would put more power in the hands of music makers and buyers. Sony's gambit (you can expect the other major labels to follow suit very quickly) will ensure that that scenerio is now highly unlikely indeed. ®