Industry Liabilities

The music industry is an ever-changing industry with its share of prosperity and risk. Owners of records label must stay ahead of current technology trends, copyrights infringements, and trademark infringements in order to stay competitive. According to Sawan (2008), “A liability is a debt or circumstance in which someone is held responsible for by law” (¶1). Knowingly or unknowingly, record labels owners and their assets are targets on the radars. Certain situations such as: the infringement case involving Grooveshark, the infringement case involving Iggy Azalea, and the trademark infringement case involving Taylor Swift; demonstrate some liabilities that record labels can face.

Recent technology has changed the availability of music to consumers. Record label file numerous infringement lawsuits against streaming sites because some streaming sites operate with the permission of copyright holders. Grooveshark was the latest streaming company declared in fault by the court for infringing against labels. According to Sisario (2014), “Grooveshark claimed 35 million users and was attracting advertising from major brands like Mercedes-Benz and Groupon” (¶3). Streaming sites have become one of the biggest liabilities to record labels, since the Internet. Streaming sites that operate with proper permission, infringe on the exclusive rights of copyrights holders, while making a huge profit from advertisements.

Record label face another liability in the form of their artist and their artist’s past. The current Case of Iggy Azalea vs. Maurice Williams is a demonstration of this liability. According to Nessif (2015), “Azalea filed a lawsuit for infringing copyright and unlawfully promoting yet-to-be released music from her early days as a struggling artist” (¶3). In this case, Maurice claims that Iggy was under contract with him, and he owns numerous of pre recorded material. Depending on the material that Maurice has in his possession, and the ruling of the court, Iggy’s records label could have to share profits and possible face the tarnishing of Iggy’s trademark.

Trademark infringement is another liability that artists and record labels face in the industry. Blue Sphere Inc. filed an infringement case against Taylor Swift for the trademark phrase “Lucky 13”. According to Radar Staff, Taylor Swift wore clothing with the phrase “Lucky 13” for a promotion sweepstakes ad. Blue Sphere had the phrased “Lucky 13” registrar with the PTO in 1991. This infringement case can ruin the image of Taylor Swift that took time and money for a record label to create. The lawsuits against Taylor can also damage the promotion sweepstake, Taylor was involved in, and the clothing company that had the phrase “Lucky 13”.

The law requires streaming sites to obtain permission from record label to have copyright material on their sites. The label that I own will be an indie label, and royalties obtained from streaming sites will be vital to the company’s success. If streaming sites continue to use copyright material illegally, it could hurt the revenue for my label. Considering the case with Iggy, Family Players Records will sign artists, and knowing the history of the artist will be important. If Family Players Records signs an artist, who is under contract with some else, this could cause the label to lose income for lawyer’s fees, and agreements might have to be made with the contract owners to share profits, that should belong to my label. This situation will in turn interfere with the budget, fix cost, and marketing planning. The case involving Taylor Swift brings awareness of the importance of seeking permission to avoid trademark confusion. Using a trademark, that someone else owns can tarnish the image of my label, and cause for profitable items to cease production.

The music industry, as mention can bring success; however there are many risks. There are people whom seem to targeted successful people and their accomplishment for financial gain. Beside people who seek financial opportunity from successful individual, individual like my self who seek success in the music industry have to make sure that we do our research, and seek legal advise before we invest time, creativity, and effort in a product.

~LTL