RECORD COMPANIES: WHAT THE URL ELSE DO THEY WANT?

With the growing popularity of the Internet and the World Wide Web, record companies are insisting that artists sign away the rights to their "U.R.L." (Uniform Resource Locator) when they sign a recording contract. As if recording agreements were not one-sided enough already, what say does the artist have in this matter? And why is owning a URL so important?

Simply put, a URL (or "domain") is your electronic address on the World Wide Web. A URL is potentially how millions of people find each other online. If somebody wants to find information on, for example, the group The Def Tones and they do not know the specific URL, they are likely to key in the address www.deftones.com. Because this address (or site) is the first one the user will visit, owning the Def Tones URL is essentially an asset.

Record companies believe that because they invest a substantial amount of money into developing their artists and building a “brand name,” they are rightfully entitled to owning the domain-plain and simple! A valid point in some cases, but how often to do we hear of labels who don’t follow through on their initial commitment to a band leaving them lost in the shuffle? Artists are dropped and resigned all the time. And with relationships lasting for as little as one album-tour cycle (if that), is it reasonable for labels to ask artists to relinquish their URL ownership in perpetuity?  If so, why not ask to own the rights to band’s names as well?

Record companies also believe that because an artist spends a substantial amount of time in the recording studios and out on the road, who better than the label to monitor and update its web sites? But again, don’t record companies typically have several bands on its rosters that are being marketing at the same time?  It’s not likely that each band will receive the time and support they actually need. A band's management team, however, may have the resources to maintain their artists’ web sites and effectively provide them with individual attention. If the management lacks this capability, it’s often the willing fan who is more than happy to help out. In fact, some of the best sites are run by fans.

So how exactly does the record company benefit from URL ownership anyway? Perhaps it comes right down to a matter of control. Record companies can use artists’ sites to extract valuable information (such as it’s fans e-mail addresses, buying habits, etc.) and then they use this data to market other bands on its label. Labels can also receive advertising dollars from other businesses who display banner ads. But without owning its own URL, doesn’t a band stand to lose out on profits it would otherwise generate from its site? A major part of an artist's revenues comes from merchandising (such as T-shirts, hats, stickers, etc.). The World Wide Web provides enormous potential for sales. Can an artist use an alternate URL? Of course, but as pointed out earlier, it simply is not as valuable.

Whatever the record companies reasons in the debate for URL ownership, one thing appears to remain certain: recording agreements have never been entirely fair to the artist and label's demands for domain ownership is just another example of the one-sidedness of deals. Mark Goldstein, Senior Vice president of Business Affairs at Warner Bros. Recordshad this to say:

“Some labels are adamant about acquiring URL ownership. Others will settle for having a license during the term with the rights going back to the artist after the deal is over and all active records have been "worked.”  But make no mistake;  it's going to be very hard at the beginning of 2003 for an new artist to retain a separate site with the "best URL. Once an artist is successful, however, everything is negotiable.

Dina LaPolt, LaPolt Law, P.C., adds