Music Notes

Artists' audit rights: The California Assembly is scheduled to vote Tuesday, June 15 on a revised bill that would give recording artists the right to audit companies to ensure proper royalty payments. The bill would also give them the right to hire auditors on a contingency fee basis, and to initiate group audits, a provision that could make audits a class action issue. The proposed legislation is the result of talks between the Recording Industry Association of America (RIAA), the American Federation of Television and Radio Artists (AFTRA), and several state legislators, in particular State Senator Kevin Murray (D-Culver City), a longtime advocate for accounting reform in the recording industry.

Murray's bill passed the California Senate last year by a 22-15 vote and now moves to the Assembly. The New York State Attorney General's office recently concluded a two-year investigation of royalty payments owed artists by the recording industry and found widespread abuses. AFTRA national executive director, Greg Hessinger, described Murray's bill as "a tremendous advance" but said his organization would keep working for "even more far-reaching reform."

Indies vs Sony/Bertelsmann: It's fascinating how the same set of facts can be used to support opposing arguments. That is exactly what is happening in Brussels as independent music companies attempt to thwart a merger petition by Sony Music and Bertelsmann's BMG presented to European Commission regulators for consideration. Some undisputed facts: Prices for recorded music rise and fall as a group, as if by collusion by a cartel of multinational corporations that controls the music industry, one in the grip of a sustained decline. Sony and Bertelsmann claim that by joining forces they could somehow make the situation better. Independent music companies claim that by doing so they could make it worse.

The two would-be partners are offering the same arguments that were rejected by the EC back in 2000, when commissioners turned down a merger petition by EMI and Warner Music—that by combining their operations they could improve efficiency, cut costs, and ultimately pass the savings along to consumers. The commission determined that reducing the number of players on the European stage from five to four would probably result in higher, not lower, prices. The music industry's "Big Five" control 75% to 85% of the global market; a Sony/BMG entity would own 25% of that, a business worth approximately $6 billion (€5 billion) annually. Universal Music Group would own a similar share. According to Brandon Mitchener in the June 10 edition of The Wall Street Journal, European Union law requires that regulators "prevent any mergers or acquisitions that would create dominant companies or strengthen the position of those that already are dominant."

During the second week of June, independent record companies lobbied to get the merger blocked. Osman Eralp, an economic advisor to Impala, an organization of approximately 2000 independent music companies, said that allowing concentration of power in a weak market would make survival all the more difficult for small companies. Patrick Zelnick, president of the French label Naïve, said that his colleagues could be optimistic about the future if the market were regulated. In May, EC regulators sent Sony and Bertelsmann a 51-page "charge sheet" detailing their objections to the merger, including high prices for CDs in all genres and evidence of "coordinated behavior" in determining prices. On June 9, the companies replied with a sealed rebuttal, to be followed by closed hearings June 14 and 15. The EC will make its decision by July 22.

Levy gets a raise: The board of directors of EMI Group PLC has given Alain Levy a big boost in salary and potential bonuses in the hope of keeping him in charge of the company's music division until March 2009. Effective April 1, his annual base salary was increased to $1.8 million (£1 million) from $1.26 million (£700,400); his annual bonus opportunity was increased to three times the base salary from two times salary, according to reports from London. The increases were deemed necessary to "remain competitive" with other music industry chief executives, EMI officials stated. Last year, EMI chairman Eric Nicoli received total remuneration of $2.48 million (£1.38 million), and music publishing chief Martin Bandier received $5.98 million (£3.32 million).

Concord acquiring Fantasy: A $90 million bid may bring Fantasy Records under the Concord Records umbrella, according to a June 10 report from The Hollywood Reporter. Owned by television producer Norman Lear, Concord beat bids by several other contenders, including Sony Music. Fantasy chairman Saul Zaentz put his company up for sale in February. The company's catalog includes Chet Baker, Count Basie, Charlie Byrd, Creedence Clearwater Revival, Sam Cooke, Miles Davis, Thelonious Monk, John Coltrane, Ella Fitzgerald, Dizzy Gillespie, Isaac Hayes, John Lee Hooker, Etta James, Stan Kenton, Charlie Parker, Otis Redding, and Lester Young. Concord Records' roster includes Karrin Allyson, Chick Corea, Michael Feinstein, Ozomatli, Peter Cincotti, and Ray Charles, who died Thursday June 10.

NARM and VSDA: Perhaps reflecting the convergence of audio and video in the electronics realm, the National Association of Recording Merchandisers (NARM) and the Video Software Dealers Association (VSDA) may merge their operations. The two groups are said to be assessing "the business and strategic merits of such a merger and are finalizing a letter of intent," according to The Hollywood Reporter. Common interests include "piracy, copyright law, First Amendment protections, theft prevention, formats, packaging and labeling, emerging business models, and digital delivery," as well as "overall industry consolidation," a June 10 report noted.

Yet another Miles Davis box set: On September 28, Columbia/Legacy will release Seven Steps to Heaven: The Complete Columbia Recordings of Miles Davis 1963–64. The recordings will be Columbia's seventh boxed set of Davis recordings, highlighting Davis's experiments with assorted performers as he sought the right lineup for his "second great quintet," an ensemble that ultimately included saxophonist Wayne Shorter, pianist Herbie Hancock, bassist Ron Carter, and drummer Tony Williams. The collection will include eight unreleased tracks and three unedited versions of previously released recordings, according to Chris Morris of