Industry Profile: Steve Gordon

— By Bob Grossweiner and Jane Cohen

Steve Gordon is an entertainment attorney and consultant based in New York City, specializing in music, television and digital transmission of entertainment content.

Steve also operates a music clearance service for record labels, producers and others using music content in concert programs, documentaries and compilations. He has completed projects for clients ranging from small record labels such as Smithsonian Folkways and Artemis to multinational corporations such as Microsoft and BMG as well as independent television producers of such programs as "Sinatra Classic Duets" on PBS and "Elvis Lives" on NBC. He also serves as senior vice president of content, licensing &acquisition for Music on Demand, a partnership between the cable TV industry and the music business to create a subscription video-on-demand service airing music programming on cable, and selling CDs, DVDs and merchandise to the subscribers of the service.

From 1991-2001 Steve served as an attorney and director of business affairs, TV/Video at Sony Music. There, he handled the clearances for thousands of music videos for Columbia and Epic Records and hundreds of long form music documentaries and TV concerts with artists such as Bruce Springsteen, Michael Jackson, Billy Joel, Mariah Carey, Jennifer Lopez, Barbara Streisand, Celine Dion and many others. As the principal lawyer for Automatic, Sony's in-house production company, he oversaw all business and legal matters for the music based TV series "Sessions at West 54th" on PBS (now on TRIO), and "Live by Request" on A&E.

Steve is currently writing a book titled "The Future of the Music Business," to be published in early 2005 by Backbeat Books. The book will focus on the rules pertaining to the music business and the new digital music industry, how artists and entrepreneurs can use the new technologies to succeed, new business models, plus discussion and interviews with artists and entrepreneurs who are inventing the future of the music business.

A graduate of New York University School of Law, Steve serves as an Instructor at the City University of New York's Graduate Center. Last fall he taught a class on the Future of the Entertainment Industry. The Association of the Bar of New York City is offering video and audio tapes of that course for 12 CLE credits to attorneys. He will teach the course again next fall.

Multi-faceted, Steve also hosts an Internet radio show on the future of the music business at http://www.MyRealBroadcast.com, that explores the rules of the music business and the new digital music industry, how artists and entrepreneurs can take advantage of the new technologies, and new business models including interviews with digital music artists and entrepreneurs. He is also a frequent contributor on articles covering entertainment and copyright law to Entertainment Law and Finance, a publication of American Lawyer, and serves on that ELF's board of editors. A recent article published in ELF, "How Compulsory License For Internet Might Help Music Industry Woes" was republished in Billboard Magazine as a special commentary titled "Licensing Could Solve Internet Piracy" on Aug. 2, 2003.

Active in industry conferences, Steve moderated a special forum on the convergence of music and fashion at the Fashion Institute of Technology in June. Speakers included Daymond John, CEO of FUBU and FB Entertainment; Denise Seegal, CEO and president of the J. Lo by Jennifer Lopez clothing line; and Eric de Fontenay, editor of MusicDish.com. He will be speaking at the upcoming Digital Media Technology Conference in Los Angeles, Sept. 9-10 at the Crowne Plaza Beverly Hills. Steve has also lectured at Columbia University, the School of Visual Arts and Brooklyn Law School.

For articles Steve has written on music and digital entertainment issues, a link to his Internet radio show, details on his course at CUNY and more, go to SteveGordonLaw.com

What is the future of the music business?
I'm writing a book on the future of the music business that will discuss the new laws and business practices applying to digital music, analyze the labels' battles with electronic piracy, propose a detailed solution, discuss how new artists and entrepreneurs can take advantage of the new technologies, and focus on new business models.

If I were to offer my prediction for the future of the music business, I would start with where we are now: Income from recorded music has declined 20% throughout the world in the last several years. Many blame unauthorized file sharing. But others blame the bad economy, competition with other diversions such as video games, and finally, the diminishing quality of the music. Yes, file sharing is a factor contributing to the music industry's decline, but that it has been exacerbated by artificially high prices for CDs and the record companies' slowness in embracing new business models made possible by the new technologies.

In addition, rock and roll revitalized pop music starting with Chuck Berry and Elvis and growing into the era of the Bob Dylan, the Rolling Stones, Beatles, Madonna and Michael Jackson. During those years the music business grew approximately tenfold. The music became a more important component in our culture and our identity than ever before. Imagine the "sexual revolution" without the music! The music became part of the boomer's very identity and their vision of the world and their future. Rock and pop are not dead, but they no longer are at the vanguard of our culture. We don't have a new Beatles or Rolling Stones. Not because new artists aren't as talented, but music isn't as vital to the culture. This generation's kids have been brought up on video games and the computer. The music is just not as huge in their life as, for example, Bob Dylan was to the lives of their parents.

That said, the future? Well, Internet delivery of music will continue to grow in both the legal and unauthorized formats. The real issue is when will the ISP and electronics industries begin to cooperate in policing against unauthorized music. It's not the kids, it's the huge corporations that control the pipe through which we receive free music (the ISP's), and the machines that allow everyone to listen and keep free music (computers containing CD burners, blank optical discs, MP3 players). They've been able to resist liability for allowing people to use the Internet to get free music. And part of the reason they've been able to get away with it (in addition to their political and economic leverage) is the content owners themselves. If the labels' strategy included getting a reasonable royalty from the ISPs and the electronics business instead of, or at least in addition to, suing kids and grandmothers, the record companies might be able to get the voluntary cooperation of the ISPs and computer manufacturers. After all, the hardware and ISP companies could easily pass the cost on to the public. And since so many people buy these products and services, the cost could be quite small to each consumer and at the same time compensate the record companies for lost sales.

This is likely to take place in the foreseeable future as a more Internet friendly and technologically sophisticated generation takes over the helms of the major labels. I see a statutory or "blanket" license like those implemented by ASCAP and BMI which allow radio and TV stations to play their entire catalog of songs in return for a percentage of the stations' income. This means that file sharing will be legal in exchange for payments to the labels by the ISPs and the electronics industry. The result will be more music for the consumer for less money, and at the same time fair compensation for the labels and the artists. New artists will make more money from this system as it usually includes paying artists 50% directly instead of the normal model of 10-20% of retail after recoupment of production, video and other costs. Under the standard recording agreement, very few artists ever receive record royalties. On the other hand, there may be less money for the superstars and the top music industry executives under a blanket license system. They depended on blockbuster album sales of CDs priced at $18 dollars or more. Since the price of music will be less, they may make less money. But who cares if Mariah Carey doesn't make another 60 million?

How do you feel illegal free down loads of music over the Internet?
It's a reaction to the artificially high price of CDs. The business has acted intelligently in bringing the price down. Again the real "pirates" were never the kids who download a music files, the "pirates" are actually multinational corporations which allow free content to be moved around the Net and downloaded through CD burners and blank optical discs and MP3s. Some of the record companies are actually owned by such concerns -- Epic and Columbia Records are both owned by Sony, for instance. These companies should compensate the labels and the artists for lost sales since they enable and even encourage unauthorized file sharing and CD burning. Remember the motto "Mix, Rip and Burn" which was used by one of the major electronics companies?

What interesting new technology is developing in the digital music world that should get more attention?
Web casting is non-interactive streaming of audio on the Internet. It's sometimes called Internet Radio. The content can originate from live or prerecorded talk, live musical performance or sporting event, CD's or other prerecorded media.

The most important thing web casting can offer is the enormous diversity of programming it can provide. Broadcast radio is profoundly constricted compared with the Internet by the limited broadcast spectrum. The number of channels available on standard AM/FM radio is limited in most locations to a couple of dozen choices. Those choices are further limited by the domination of commercial radio by a handful of corporate conglomerates including Infinity Radio and the Clear Channel. A great deal of main stream commercial radio, AM or FM, sounds like one long commercial "interrupted" by shouting by shock jocks and right wing commentators. Web casting makes it possible for a potentially unlimited number of independent voices transmitting a virtually unlimited programming including music. In addition one web caster can provide an incredibly broad range of different "streams."

Internet radio, as opposed traditional broadcast radio, could potentially offer listeners an indefinite number of choices including music. Thousands of Internet radio stations are already available to listeners. For a sample of the variety, check www.live365.com/ or www.radio-locator.com. And the music is as diverse as the not-for-profit and commercial operators running the stations are. In addition, a listener is not limited by geography. He or she can listen to a favorite station anywhere in the world with an Internet connection. In traditional radio broadcasting, a station's signal is available to only the listeners within range of the transmitter. At present, many potential webcast listeners don't have the equipment needed for good reception because of limited bandwidth, and/or computers not connected to home entertainment systems. But many experts agree that as the technology becomes more sophisticated and consumers upgrade their home entertainment systems, the potential for Internet radio and web casting are unlimited.

According to Arbitron, over 17 million people listen to traditional radio every day in the US. But an estimated 103 million Americans have listened to Internet broadcasts according to a new study by Arbitron and Edison Media Research. The study reveals that the percentage of all Americans who currently use Internet audio or video (44 percent) is nearly twice the size of what it was three years ago (24%). According to a study by the General Accounting Office (GAO) the audit, evaluation and investigative am of Congress, published in June 2004, "The popularity of webcasting is growing, with the number of listeners tripling over the past three years."

What are some tips for the clearance of music for TV and movies the Internet?
My main business is to secure clearances for music, TV and movie footage, and other forms of intellectual property for use in documentaries; CD and DVD compilations, movies, and Internet based projects. My principal clients are TV producers, record companies and digital content providers. For instance, I'm presently clearing numerous songs, masters, videos, performers and celebrities in a history of hip hop documentary to air next fall on VH1. Another project is an Imax movie, which will feature music and fashion that I'm helping the producer secure new performances by major music recording artists as well as licenses to use prerecorded music.

I would strongly suggest that prior to finalizing a budget for any entertainment project, if you intend to use any third party music or footage that you consult with a professional on clearance strategies. If you want to save money and you have the time, you can always try to secure the clearances yourself. But an expert can inform you what the industry standards are so you can fashion your requests for permission to use copyrighted material for the lowest possible fees.

For instance, there are different industry standards to use music in different media such as cable or network TV, territories such as U.S. or foreign and terms such as one year or five years. The consultant can help you figure out how much it will cost to clear what you want to use, whether you can afford it, how to cut the cost of clearances by using different or less material and what media you want to clear.

With regard to the last point, many TV as well as movie projects have an additional life on DVD now. You should plan for this opportunity. A consultant will be able to tell you what the cost of DVD licenses will be. There are also techniques of getting the costs down. For instance, by using options for future uses and media, you can avoid up front payments. This can save you a lot of money.

First concert attended
My third grade class took us to see Bizet's Carmen at the Met in New York in the 1963.

First concert worked
I produced a series of jazz concerts in the 80's to raise money for the homeless. It was called Jazz for the Homeless, and we had some great artists including Ray Valentine and Al DiMeola. We played venues such as Saint Peter's Church, which is known as the Jazz Church, and the Yale Club.

First entertainment industry job
Working at a law firm on the "High Society Magazine" case during law school. The client published Ann Margaret's nude stills from a movie called "Magic," and we defended that her "right of privacy" was trumped by the public's right to information. We won the case, which was exciting. And we definitely had the most interesting "exhibits" of any law case that year.

Career highlights
Landing a job as a lawyer at Sony Music. I always wanted to practice law in a big entertainment company in NYC.

Career disappointment
Leaving a job at a movie studio, Dino De Laurentis in Beverly Hills, because I was home sick for New York. After I left, I missed the glamour.

Greatest challenge / Best business decision
Establishing my entertainment law, consulting and clearance practice after leaving Sony.

Best advice you received
"Be the best at what you do" -- my uncle Eddy.

Best advice to offer
Follow your passion. If you screw up your dream by making a mistake or getting off track, don't be afraid to pursue your dream again.

Most memorable industry experience
When I met Bobby Robinson last week, the producer of Grand Master Flash. He was terrific, authentic and still excited by his career.

What friends would be surprised to learn about you
That I'm writing a book.

Office paraphernalia
My view of the Hudson River in Tribeca.

If I wasn't doing this, I would be...
...nothing -- this is who I am.

Industry Mentor
Eric Kulberg because he loves the business. Eric served as a director and production manager at WTTG/Metromedia in Washington D.C. Now he's a producer, most recently of the critically acclaimed Jack Paar on PBS and home video, music consultant to the Kennedy Center Honors and one of the most capable people in the world at finding and clearing music and footage ranging from reggae to rock.

Steve can be reached at 212-924-1166; e-mail: stevegordonlaw1@aol.com