HITS Daily Double
"If we negotiated two-to-three-album-only deals going in, the seven-year statute would
be moot."


An Exclusive HITS Dialogue With Fred Davis
Of Davis, Shapiro & Lewit

Entertainment attorney Fred Davis is a founding partner of Davis, Shapiro & Lewit, a prominent law firm specializing in music law. He is also, of course, the son of industry legend Mo Ostin. All kidding aside, Davis has demonstrated throughout his career an unparalleled commitment to artists’ rights and to the values embodied in the Bill of Rights that the ACLU supports.

In the recent past, the Internet has given artists the ability to find new audiences while expanding the marketplace of ideas. However, it has also created some very difficult copyright issues and Davis has been engaged in this discussion at every level. He has participated in numerous debates on the future of artists’ rights, including a recent symposium in Washington, DC, concerning the future of copyright on the Internet.

But copyright is only one issue occupying his growing concerns for artists’ rights. Davis is also a strong supporter of the organization Oneness, which promotes racial harmony through educational initiatives, workshops, conferences and lectures. Davis is the sole music industry representative on the board of directors of the September 11th Fund. Last week, Davis was presented with the ACLU’s Bill of Rights Award at the Regent Beverly Wilshire Hotel, where Showtime’s Jerry Offsay, Antonio Villaraigosa, Angela Bassett and Camryn Manheim were also feted. He takes time out from celebrating the honor by deigning to speak with HITS’ own politically incorrect Marc "Hasn’t Voted Since McGovern Ran For President" Pollack.

What does the ACLU mean to you?
Clearly, the ACLU is an organization that stands up for freedom of speech. It is a goal and an aspiration that we all are proud of and want to stand behind. In these days, where the issue of freedom has become such a high-profile and important one, we’ve all taken for granted the freedoms that we were given at birth. Now is the time for us to refocus all of our energies on those freedoms, and to really appreciate the efforts of the ACLU and what it stands for.

How do you react to receiving the organization’s Bill of Rights award?
I’m honored that my peers and my community have respected my efforts in representing artists and standing up for those issues that our clients feel are important. This is a work in progress. To be recognized so early in my career is very special. Obviously, there is a lot more we have to accomplish and many issues we still have to face.

Receiving this award places you in the distinguished company of other ACLU honorees.
People like Danny Goldberg, Jeff Kwatinetz, Jason Flom and others have been honored. The ACLU is trying to reach out to a younger generation and what’s great is that they feel that we can do that. And our peer group, my generation, has been very apathetic. We don’t have many causes that we stand up for; we’re not very charitable-minded compared to our predecessors. The fact that I can stand up and reach out to my contemporaries is what I’m most proud of.

There are several legal issues facing the industry at the moment, including artists’ rights in the digital world. How much of a threat do you feel Napster and the other illegal online services pose to the music business?
I’m very concerned. Clearly the protection of artists’ rights and the prohibition of stealing one’s music is critical. Where we have been successful as an industry is collectively standing up and protecting those rights. Where we have failed is not having a Plan B. We haven’t been able to harness the great commercial potential of the community that wants to acquire, utilize and access music through the Internet to any meaningful means. We’ve been very successful in protecting our artists’ rights, but very unsuccessful in exploiting them commercially.

Do you think that subscription services like MusicNet and Pressplay will provide significant revenue for the labels at some period?
I’m skeptical about their potential commercial viability. And I’m also skeptical about how the artists are going to be compensated fairly and correctly in the exploitation of their music on the two services.

Is there a plan to compensate the artists?
Not yet. If there is a plan in place, they haven’t done even a fair job in communicating it to the artist community. Is it possible to compensate the artists correctly? Yes. Is it likely that the artists are going to be compensated correctly without a fight? No.

Will negotiations for artists’ contracts in the future be affected by these services?
Absolutely. The artists’ contracts have grown in number of pages over the years to where they’re 60, 70, 80 pages long, because they constantly are asked to address new issues that come up. This clearly will be one of those issues that will be negotiated many times over the forthcoming years.

What about the seven-year statute law that’s currently under review? Will it be revoked or reworked?
The seven-year statute is clearly a contentious issue and the subject of a high-profile debate in the California legislature as we speak. In correlation to the seven-year statute issue is one that I am a strong advocate of. The community that I am part of has neglected a very important issue in the negotiation of recording agreements and that is the length of the deal. If we negotiated two-to-three-album-only deals going in, the seven-year statute would be moot. The reason the seven-year statute is an issue is because we’re accepting, almost routinely, six- or seven- or even eight-album deals. What we need to do—as a community, as managers, as business managers and as lawyers—is focus on the reduction in the albums that we’re allowing the artists to commit to with the record companies.

The problem is, these days, bands are no longer allowed the time to develop.
The days of true artist development are over. If artist development does take place, it’s the exception to the rule or a matter of chance. Nobody can claim—in the Rap, Urban or Pop area—that development is even an issue when signing an artist. The exception might be in the Rock area, but I would say that 90% of the time when an artist is signed, it’s because there’s an expectation that there will be a radio hit out of the box.
It’s a direct result of the consolidation of the record industry—where the conglomerates require annual, if not quarterly, results. And there’s such pressure for immediate return on what’s invested. That’s the barometer that all of the executives are judged by. The hit single is more important than ever. If an album sells 5, 6, 7 million out of the box, that’s not artist development—it’s an artist we can be proud of. There’s a difference between an artist we can be proud of and artist development. Alicia Keys is hopefully an artist that will develop, but she did have an enormous first week. The development part comes from the artist, not the label.

Labels are not willing to take the time anymore.
They can’t afford to. Because the cost of breaking an act is now so extraordinarily high and the pressure from the corporate level is so strong to have immediate results, artist development is getting squeezed out.

Do you see the industry recovering from its current doldrums?
I don’t think the record industry is in a slump. My perception is that the companies probably need to do a better job and be more conservative in their expenditures. But we’re selling millions and billions of dollars worth of records. We have to figure out how to manage our business better.

So it’s something that has to come from within.
That’s the most important of the issues facing the industry. Secondarily, we should be more aggressive and more creative in ways to exploit our music through the Internet and other resources. Lets make $1.50 from the same dollar.