Mr Longtale came up with the basic idea so it's for him to explain. He is the guy with the hat and the big head filled with know how. Mr Longtale please explain.

Mr Longtale: So we have had a developing recording and publishing industry for quite a few decades now. Lets start looking at the recording industry.

There were many recording companies and there were many small operators trying to carve out their share of the market. Slowly they started to develop a system and slowly they carved out an economic model. The clever ones (those who signed cool music and managed to get the numbers to work) made a lot of money. The less clever lost money and went out of business. Then the new boys started top copy the economic models of the successful companies and slowly an industry was developed and “standard” deals were commonplace.

[If you have ever read a recording contract you will have read things like “controlled composition clauses” “3/4 rate clauses” Printing and packaging deductions” Royalties based on 90% of sales” “reserves clauses” “Foreign sales reductions” and more – All of these actually reduce the actual royalty you are paid. It's all part of the smoke and mirrors game that the record companies play – We will give you X points on the record BUT always subject to – and then the list starts, and everything on the list is something that they (the record companies) claw back.]

Added to this list is the wonderful “Exclusively Signed” concept. This is to be expected if a company spends money on you and if they pay you an advance for your rights. But beware sometimes (not always) this is up front slavery – In the dance market many people sign a deal where they give away exclusivity for a pittance and then find themselves at the mercy of the record company. There is normally a re-recording restriction so even if the  record company drops you – you cannot re-record your songs. 3^rd parties can cover your tunes but you cannot. These same clauses can be found in many indie deals. - In short it is Mr Longtale's opinion that many people are duped into artistic slavery.

The problem is that you cannot blame your label for issuing a regular style agreement , nor can you blame your lawyer for advising you to sign it. - As most of the people in the world are sheep and cautious they normally cling to what they know. This means that it is likely that your label will adopt a model that it knows rather than invent a new economic model. Your lawyer will be happy to interpret an agreement along the lines of the hundreds he has seen before – remember its his/her job to make the agreement fair – not to suggest a whole new economic model for the exploitation of your recordings. [Deals are hard to get and they do not want to frighten the record company off ]

The existing model was tweaked a bit over the years but essentially it was a model that worked and people knew how to manipulate it. The model was understood by Artists, Managers, Accountants, Auditors, Record Executives, Publishers, Agents, PR people, Advertisers, Film industry, the Collection Societies, Neighbouring Rights Agencies and the Tax Man. In short it is generally understood by the industry and the basic theme has been “If it ain't broke, don't fix it”

So why does Mr Longtale say its time to create an alternative?

Firstly – Mr Longtale does not say "lets ditch the old system". If it's there and it works for you, then use it, If a deal was good and it worked for me I would use it.

Secondly – The Alternative – Why create one?

Just look around – The system is failing – It's top heavy and collapsing. Look at the collapse of the retail sector – Tower Records in The USA did a spectacular flop. In the UK the indie record stores are disappearing from the high street. Fopp Records in the UK grew fantastically and was a great place to shop, then they forgot their strengths and adopted accepted practice and failed.

Look at the big record companies EMI has been in turmoil, there have been big mergers SONY/BMG, Warner's trying to take over EMI, Virgin swallowed by EMI, The sale of the Capitol Records building in LA. EMI moving the publishing operation out of the Charing X building in London. (Does this suggest that the new investors are looking more to property as their core business than the copyrights that they purport to have as their main interest? - Are they breaking up the company and asset stripping?)

Lets look at the internet. For ages the record industry has been screaming that MP3's lose them money, for ages they have been harping on about DRM's, SONY actually snuck (Rootkit) malware onto peoples computers ( http://www.networkworld.com/columnists/2005/110705backspin.html ), EMI put copy protect (crude - Mr Longtale took about an hour to convert it into MP3 format) on some of its releases and iTunes decided how many devices you could put your downloads on to. iTunes and Sony made it difficult for you not to use their proprietary software to play their music.

[Interestingly Mr Longtale was at an industry gathering where some of the heavyweights were harping on about the need for DRM and implying that all consumers were potential thieves. Mr Longtale asked the assembled how many people used Microsoft Office – About 80% put up their hands, he then asked how many were using legal, bought and paid for software – again 80% put up their hands. He found that interesting – why did they pay for Microsoft Office when Open Office is free and does exactly the same job? (this is written on Open Office) The reason being is that Microsoft has made it cool to have its software, then it has spent a lot of money making people feel guilty for using unlicensed software. They have developed a culture of paying users. The record industry should do the same, Mr Longtale suggests.]

Another reason record companies lose money is because they have failed to understand the secondary use industry. They do not understand the film world, computer games, television, mobile phones and the theatre. Yes, they do have special projects divisions and yes they do some big events with big established artists, so you have Mama Mia, The Buddy Holly Story, the Queen show etc, The really big names in Films (usually at the request of the film Co.) . – But to the new upcoming artists the only way you get a look in at anything is if you give away your rights and even that opportunity is very rare. It is the middle ground between just giving rights away and the big bucks earners that is so difficult to navigate and it is this area which Mr Longtale contends that many of the majors simply do not understand. The point here is that many majors employ clerks in the secondary exploitation departments. They work off rate cards and cannot see a deal unless it appears exactly as prescribed on the rate card.

This is a good thing as it creates a wonderful opportunity for anyone who can smell a good deal, or even better who can turn an initial approach into a great opportunity for their Artists.

It is precisely because of the above that Mr Longtale decided to create an alternative.