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Artists' groups are celebrating what they hope will be more than a symbolic victory over the recording industry in the wake of legislation signed by President Clinton the last week of October. Known as "The Works Made for Hire and Copyright Corrections Act," the repeal negates a provision that was inserted into last year's "Satellite Home Viewer Act" at the insistence of the Recording Industry Association of America, designating musical recordings as "works for hire." Such a designation catergorizes a musical recording as a commodity that can be purchased at a fixed price, such as a table built by a furniture craftsman, rather than as a performance subject to syndication and royalty fees.

Little-noted evidence of the music industry's power in Washington, the "works for hire" designation would have deprived many musicians—especially second- and third-tier artists with little negotiating power—of any rights to royalties. Although the repeal doesn't officially take effect until 2013, recording artists can begin their campaigns to reclaim ownership of master recordings of their performances as early as 2003. The new law will only affect recordings made after 1978.

A recording contract with a major label is a consummate goal for many musicians, who discover to their dismay that they have signed Faustian pacts that limit not only their future income, but also when and where they can perform. Although most top stars are multimillionaires with royalty deals providing revenue for years to come, their lesser-known colleagues are often victimized by contracts that cut them out of the profit picture. Having signed their rights away, many minor acts collect little or nothing from re-issues of their music.

Record labels may try to invoke other aspects of copyright law to work around the repeal, according to several observers. Many recordings are collaborative affairs among performers, engineers, and producers, a situation that could unleash a storm of litigation as lawyers seek to prove exactly who the "authors" are.