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Clear Channel Rivals Cry Foul Over Live Concert CDs
Sat May 29,10:40 AM ET Add Entertainment - Reuters Industry to My
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By Sue Zeidler
LOS ANGELES (Reuters) - Clear Channel Communications Inc. is under
fire from smaller rivals worried that it will shut them out of the
quickly growing business of offering live-concert CDs immediately
after shows.
San Antonio, Texas-based Clear Channel claims a key patent for the
technology to offer such recordings, but competitors challenge
whether that gives the company exclusive rights to create and sell
instant recordings of live performances.
The competing claims comes as Clear Channel, which is the No. 1 U.S.
radio station owner, faces a trial in August over allegations that it
abused its radio market clout to benefit its concert business.
The most recent friction began in April when Clear Channel announced
that it had bought a key patent for producing live CD recordings
within 5 minutes after concerts.
But smaller companies, like Santa Monica, California-based Kufala
Recordings, which also records live concerts, claim the patent is a
veiled effort to muscle them out of a previously negotiable market.
"If you try to provide similar services ... they're going to sue you
for patent infringement or to license their patent," said Kufala
president Brady Lahr. "Clear Channel is really using their monopoly
in the market to powerfully restrain trade above and beyond the
patent issue."
Brian Becker, chief executive of Clear Channel's live entertainment
unit, responded on Friday by saying the company had invested
substantial resources over the past two years in its Instant Live
recording service.
"We want this service to be in widespread use and welcome all
legitimate and serious conversations with those interested in
licensing our patent. We will not, however, conduct licensing
conversations in public or via the media," he said.
Instant Live has already recorded concerts by the Allman Brothers,
and Clear Channel expects to enter into deals with more than 40 acts
to produce live recordings this season.
But Richardson, Texas-based Immediatek Inc., the parent of DiscLive
Inc, which also records live concert CDs, said Clear Channel's patent
did not give it exclusive rights to the business of creating
recordings of live performances.
"Our attorneys have provided Clear Channel's attorneys with this
information and more to detail why their patent is not relevant to
the DiscLive system and requested that they provide us with specific
details if they disagree," said Zach Bair, chief executive of
Immediatek in a statement this week.
Immediatek said it plans to continue rolling out its DiscLive product
shortly after live shows.
Music attorneys said approval is always required by multiple parties,
including the artist, record label, music publisher, and venue owner
before a live concert CD can be recorded.
But Lahr said Clear Channel's market concentration was changing the
playing field. "From our past experiences, every venue has been open
and willing to negotiate their venue fees except for Clear Channel,"
said Lahr.
"Now virtually all performing artists like the Pixies, Billy Idol
(news), and even Bruce Springsteen (news) run the risk that if they
record their own shows at any venue in the country, then sell the CDs
that same night, Clear Channel can and will go after the artists and
make them pay," said Lahr.
Clear Channel Entertainment currently owns, operates or exclusively
books about 130 concert venues, including nearly 100 in North
America.
Last month, a federal judge in Denver ruled there was evidence Clear
Channel had abused its clout by threatening to keep artists off the
air unless they performed at its shows and ordered Clear Channel to
stand trial in August.
The ruling came in a lawsuit filed in August 2001 by small Denver
concert promoter Nobody in Particular Presents. The lawsuit accuses
Clear Channel of violating antitrust laws.
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