Sony Music has added language to its standard contracts that gives the company ownership over an artist's name--as well as any variation of it--for use as a domain name. Moreover, the clause is written as a lifetime provision that would apply even if the artist and Sony part ways.
"Sony and its licensees shall have the exclusive right, throughout the world, and shall have the exclusive right to authorize other persons, to create, maintain, and host any and all Web sites relating to the artist and to register and use the name '[artist name].com' and any variations thereof which embody the artist's name as Uniform Resource Locators (or 'URLs'), addresses, or domain names for each Web site created by Sony in respect of the artist," according to a copy of a Sony Music contract obtained by CNET News.com.
In addition, the contract states: "All such Web sites and all rights thereto and derived therefrom shall be Sony's property throughout the territory and in perpetuity."
A Sony Music spokeswoman said the company does not comment on artist contracts.
The unusual clause runs counter to recent high-profile deals indicating that the "Big Five" record companies--Sony Music, Universal Music, BMG, Warner Music, and EMI--are beginning to embrace the openness of the Internet and relative freedoms the medium accords their artists. The contract appears to reflect a fear at Sony that it may lose control over its artists through the Web, according to lawyers and managers.
At issue is what some say is the gateway to new forms of artist marketing and distribution on the Web. Today, for example, when a CD is sold in a retail store, the record company and artist don't get any information about the buyer. But online, a record company or artist can ask a consumer to register and provide valuable marketing information before getting content via stream or download--such as demographic data, email names, and home addresses.
Then, when a new CD is coming out or an artist's tour is booked in a particular part of the country, the information can be used to send messages to fans in the area. That opens up a host of new opportunities to the music business.
"The URL encompasses everything related to an artist's career," said John Parres, an Internet specialist who works with Artists Management Group, a management company founded by Hollywood mogul Michael Ovitz. "It is the key to everything. To make that a condition of the contract is way beyond the scope of the contract. The URL is the relationship between the artist and the fan."
The language in the contract "has to do with control, not just making money," said Bobby Rosenbloum, an attorney at the Atlanta office of Greenberg Traurig. Among the firm's clients is hip-hop artist Canibus, who is signed to Universal Music.
None of the labels operated by Universal insists upon owning an artist's URL, according to Larry Kenswil, president of global electronic commerce and advanced technology for Universal Music.
Web sites present business opportunities beyond commercial music. Canibus's site offers merchandise such as T-shirts and posts songs and videos that he created on his own and are not part of his record contract. The site also offers a place where fans can send Canibus email, which he checks each week, according to the site.
Artist Ice T, who has a deal with online music company Atomic Pop and has formed his own label, dubbed Coroner Records, said his Internet efforts have allowed him to forge valuable ties to his fans.
He said in an interview that he has 200,000 fans on his email mailing list, and "those are the people I'm going to push the album to because they've already shown interest."
Such overtures could be frowned upon by record companies such as Sony. Studios that try to rein in artist Web activities want to stop the artists from "doing anything that could even be perceived as competing with the label," Rosenbloum said.
Attorney Scott Harrington, a partner with Manatt, Phelps & Phillips, noted that at issue is not so much an artist's name, but rather his or her official Web site--especially because many bands are finding that their names are already owned by someone else online. Still, he added, the record companies have the right to be an artist's exclusive record distributor but not to control the artist's official site.
"I don't think they have any more right to this than they have over the publishing or the merchandise or anything else that isn't their business," Harrington said. He added, however, that the record companies "are not saying, 'We own [the URL].' They're saying, 'We want it if you want to give it to us.' It's not a right--it's a contractual thing."
But Jeff Price, co-owner and general manager of NewYork-based independent label SpinArt Records, pointed out that it can be difficult for an artist to turn away a deal from a major record label, regardless of the terms addressing the Web.
"If you're a baby band and you're being offered six figures and you're broke, it's hard to say no," Price said. "But you have no concept at that time of what the value of that [URL] will be down the road."
Ice T agreed, adding that using Web interests as currency in recording deals is "a bad thing for any kid who signs a traditional record contract now or in the next year. They're going to miss this whole Internet thing because [the record company] owns them for the next seven years."
Harrington--whose law firm represents artists such as Sheryl Crow, Everclear, and the Wallflowers, as well as small labels such as Capricorn and Thump--said the major record companies are realizing that the future of their business in large part could rely on Web-based, "lifestyle" communities, which they ultimately want to control. But all they really have the right to is sales of recordings an artist made while under contract to them.
"They don't really know what they're going to do" with control over artist sites, Harrington said. "Maybe what they need to say is that in perpetuity you always need a link to us to buy your catalog. But once you leave the label they don't need to control your official Web site--they have nothing to do with you anymore."
Some artists view a Web site as part of the services that can be offered by a record company, along with setting up the recording process, said Jeremy Welt, head of new media for Maverick Records, which is a joint venture with "Big Five" company Warner Music.
"A lot of times, an artist will come to me and say, 'Can you register my domain?' When I do that, I register it under Maverick," he said.
Welt said Maverick has only had one artist leave the label, and in that case Maverick kept the URL. Maverick continues to host and maintain the site, but it is only used for marketing--no merchandise or CDs are sold on it.
"All these issues will be dealt with on a case-by-case basis," Welt said, adding that Warner Music does not have a company-wide policy on artist URLs either.
Many within the industry say artists should create their own Web sites, independent of any record company efforts.
"Every artist should have their own site up because it gives their music more exposure," Ice T said. "[An artist] can turn himself into a label. He can use his site to promote other artists. So people come to his site to check him out and he can say, 'Hey, check out this girl I'm working with' and sell her records."