Some musicians say Web record label is old hat

Founded by Universal Music chairman Doug Morris and Jimmy Iovine, co-chairman of Universal's Interscope Geffen A&M banner, Jimmy and Doug's FarmClub.com will select more than 100 unsigned musicians to appear alongside stars on its weekly USA Network TV show this year. The up-and-comers will be picked based on how many votes their MP3 music tracks get on the Web site.

Aside from having well-known founders, FarmClub is being closely watched because it has pitched itself as a next-generation label. Its plan is to tap the plethora of unsigned artists who have flocked to the Net and to possibly offer them something that many other start-up Net music sites can't: a shot at a deal with a company that is tight with a "Big Five" record label.

"We think it will be a great model for the record company of the future," Iovine said in an interview. "In this company we get the best of all worlds; we have the firepower of the majors, but we can move 100 miles an hour."

Despite the buzz, however, speculation is brewing over how revolutionary FarmClub really is. Although some artists are grateful to get the attention, others say FarmClub's recording contracts represent business as usual in the industry--not the maverick spirit of the digital music wave.

The Rosenbergs is one band that was invited to play on FarmClub, but the New York-based group rejected the offer after reading the contract. Although it did appear in a brief promotional clip on the show, the band has became a vocal critic of FarmClub. And even though it is kissing off any chance of being picked up by the label or of garnering its potentially huge promotional and marketing power, the group doesn't care.

"They are promoting their label as moving into the future with the Net, and (Iovine and Morris) are using their first names like they are your drinking buddies, but they aren't fair," said The Rosenbergs' David Fagin, who sings and plays guitar. "It's the same-old, same-old. They will own everything."

Before artists can appear on FarmClub's TV show to perform just one song, they have a small window of time to sign an approximately 20-page contract. The standard contract, obtained by CNET News.com, gives FarmClub an option to enter into a recording agreement with the artist within 30 days; lays out a six-album deal with advances ranging from $275,000 to $650,000 for each record; and offers 14 to 17 percent in sales royalties. FarmClub originally asked for an exclusive 60-day option to sign a band.

On the surface, terms such as these are common for a first-draft recording contract. But FarmClub also claims all rights to a musician's "official" Web site and online distribution, a tactic that brought Sony Music under fire when it decided to stake a claim to its artists' Web properties.

The difference with FarmClub, music insiders say, is that it has promised to change the old game. Many unsigned artists may come online in hopes of being signed by a major record company. But others, including popular artists such as Ice T and Public Enemy's Chuck D, are encoding their music in the MP3 format and using the Net to take their music directly to consumers without being indebted to the labels.

Several lawyers and executives from the traditional and digital music industries who were interviewed agreed that regardless of its Net angle, FarmClub's approach is less than ground-breaking. The Net music market may seem like a free-for-all, but before signing an agreement with any company, artists still need to consult an attorney and read the fine print.

"They take their digital rights and the artists' domain names and a long list of other things that are also old school and not terribly enlightened," said one executive, who asked not to be named. "The unfortunate part of this is that they are giving artists the chance to get national TV exposure, but they dangle this not-so-fair deal in front of them to get it."

FarmClub's chiefs countered that the company is offering artists a business proposition and doesn't force them to do anything. Moreover, after the 30-day option is up, artists are free to sign with any other label. Artists who have a presence on the FarmClub site also are free agents. The founders said the contract is fair, and that in taking the risk of signing a new band, they simply need to protect their interests.

"We don't care if another label signs a band on our site; we're cool with that," said Iovine, who has been in the business for 25 years and has produced for bands such as U2.

"We offer a very strong deal and a very strong label. If you come on the show, we consider it a very fair deal," he added. " If I believe in a band, I want to work with them on all levels of marketing. We host their Web site while they're on the label, and it's all negotiable."

Since going live about two weeks ago, the site, which is being promoted by America Online, has received 30,000 to 50,000 visitors each day. In addition, nearly 4 million people watched the show in the first two weeks it aired, treated to sets by more famous acts such as Limp Bizkit and Korn, according to Universal's parent company, Seagram.

The label already has signed the singer and DJ Sonique and apparently is in talks with the Petaluma, Calif., pop band Headboard, which appeared on the show's first episode.

In the next few months, the site will add a musician database so artists around the country can hook up to jam. Any artist can have a presence on FarmClub--even if they aren't affiliated with the label--just as they can on other Web sites.

Some artists who have appeared on FarmClub's TV show or who are mulling the contract say the label is willing to negotiate, and that overall, the exposure is awesome.

"It was a positive experience, and they treated us well," said Jeff Cardoni, of the rock and pop band Skycopter9, which was on the show last Monday.

The members of Skycopter9 all have day jobs, and aside from uploading their songs to FarmClub, they also have a site on MP3.com. The band sees the FarmClub gig--and the possibility of a record deal with the label--as a huge step up.

"FarmClub has muscle and more credibility as far as taking it to the next level," Cardoni said. "The Net (on its own) hasn't translated to success in the real world yet."

Fran Lucci, a singer who has marketed herself online more actively than Skycopter9 has, was thrilled to be invited on FarmClub. Her lawyer is trying to tinker with the contract, however.

"The contract is protecting them because they are going to give you a lot of exposure by putting you on the show, and they want first dibs should they choose to sign," Lucci said.

"I guess because of how the Net has changed the way we listen to music they are feeling a little bit nervous, and they want to make good on their investment; they don't want you selling their product yourself," she added. "I'm confident that we'll work it out. If FarmClub doesn't sign me, I still think this is terrific."