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RIAA Forgets to Make Royalty Payments
theodp writes "NY Attorney General Eliot Spitzer agreed with the RIAA on one point - artists WERE being deprived of money that was rightfully theirs. But Spitzer managed to find $50 million for performers without shaking down grandmothers. Spitzer's culprits? A Who's Who of the nation's top recording companies - members of the RIAA - who failed to maintain contact with artists and stopped making required royalty payments."
RIAA forgets to pay royalties? From the article it was the RIAA lawyer who brought the problem up. The RIAA member companies were not forgetting to pay anyone. They had lost contact with the artists not through any fault of their own, but because the artists had not updated their contact details. Shite - even evil entities are capable of acts of good. In this case the RIAA did the right thing.
The royalties are nothing to the RIAA, the amount the artists receive are about 50 cents out of the average $15 CD. That's why the organized music industry is so strong--they have an extremely vested interest in keeping this atrocious pricing structure intact. The real reason the internet worries the RIAA is that for the first time, artists (like Prince and Pearl Jam) have the ability to completely bypass this archaic distribution system and sell directly to the consumer, without all the associated markups, and receive a larger piece of the pie. Commercial distribution systems like iTunes are actually closer to traditional CD/vinyl sales, at least in their royalty structure.
The principle of escheat has been around for a long time (think English Common Law), at least in real estate. The idea is to prevent any piece of real property from having no owner.
For example, if a person dies with no heirs and no will, that person's property reverts to the state under escheat. Consider what would happen without escheat: the person's property would fall into a legal black hole. It would have no owner and therefore no way of transferring ownership or assigning use rights to third parties.
Usually what happens is that the property in question is placed in escrow while a more in depth search for heirs is done. If the heirs can't be found everything will be sold at auction with the State keeping the proceeds.
AFAIK, the principle works the about the same in all areas outside real estate. IANAL. YMMV.
What I find amazing is that the record companies didn't put a reversion clause in their contracts. That is, if an artist or his/her heirs can't be found, the the royalties revert to the company.
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