Laurie Soriano, a partner with Manatt, Phelps & Phillips in Los Angeles, discusses the state of the music industry in an edited version of her interview on Nov. 30, 2004.

As 2004 came to a close, Billboard sat down with a dozen lawyers to discuss the state of the music industry.

Their work in connection with the industry varies. For example, Attorney General John Ashcroft and Deputy Chief of Staff David Israelite enforce laws against those who steal copyrighted works.

Two federal appellate court judges, Alex Kozinski (Ninth Circuit) and Richard Posner (Seventh Circuit), occasionally review cases involving copyright issues, technology or music.

Other lawyers litigate, advise clients, broker and negotiate deals and watch the trends around the world.

Laurie Soriano, a partner with Manatt, Phelps & Phillips in Los Angeles, is a strategist, advisor and negotiator. She represents songwriters -- new and veteran -- such as Diane Warren, John Linde, Bruce Roberts and Billy Steinberg, and a number of music supervisors.

She also works with artists who run their own labels, such as Carole King and Aimee Mann, as well as companies like Sub Pop Records and Beacon Pictures.

Day to day, about 10% of her work involves contracts. The rest of her time is spent advising and counseling clients in legal and business matters, strategizing -- determining which competing offers are the best for a client -- and dealing with infringement matters, either defending or making claims of infringement.

Much of what Soriano does has a marketing approach. She helps to structure her clients' entire careers and then crafts their deals to help them move toward their goals.

Manatt, Phelps & Phillips also represents companies such as American Express and Coca-Cola, so Soriano can often connect clients to work with one another.

The following is an edited version of her interview on Nov. 30, 2004.

What changes or trends have you seen during 2004?

For new artist deals, labels are really looking for artists with some predictable fan base. I've seen a lot of deals with actresses getting record deals even before anyone knows if they can sing. If it's a band, it's one that's been out playing or gotten an independent following; then the bigger labels become interested.

I'm also very actively involved in branded entertainment. I've seen a lot more interest and activity in that area. One of the most interesting examples last year was for [DreamWorks film] "Shark Tale." I represent Cheryl Lynn, the disco singer. She was approached about her song "Got to Be Real." Mary J. Blige was going to record it, there was going to be a Coke campaign that was going to use that recording and a product placement of a Coke billboard in the movie.

We were going to allow the song to be used, but at same time we wanted to get a new Cheryl Lynn track in the movie. So her new song, "Sweet Kind of Life" became the end title song. It was a win for her and for DreamWorks.

What changes in branded entertainment have you seen in the last year?

I've seen an incredibly rapid movement from artists being willing to associate themselves with brands but now aggressively seeking opportunities. Now that they've seen it done successfully, like Sting and Michael McDonald, everybody wants to jump on, especially artists that want to change their image and maybe get out there to a new demographic, or artists who aren't getting the push they need from their record company.

What other opportunities are you seeing?

There is an increased surge in musical theater projects. After the [Broadway] success of "Movin' Out" [with the music of Billy Joel] and "Mama Mia" [incorporating part of the Abba catalog], I'm seeing a ton of projects being developed based on all kinds of catalog music. But I wonder if there's going to be a glutted market.

There is also a movement toward selling CDs through non-traditional retail, such as the Ray Charles CD that Concord is putting out in Starbucks. There's going to be a lot more of those kinds of deals -- something other than traditional brick-and-mortar record stores -- especially with the older demographic, those people who don't have time to go to a traditional retail store.

CDs can become an impulse buy, like James Taylor CDs in Hallmark stores or other CDs being sold in clothing chains like some Banana Republic stores. If an artist is associated with that brand, why not sell their CD in the stores?

What about digital trends?

Ringtones are sweeping into my life, even with artists who don't have record deals. Name artists who are known but don't have a current deal are being asked to record original material for ringtones. I can see we're moving toward the cell phone as an entertainment center.

I'm seeing veteran artists who are smart enough to realize that their re-recording restrictions [which restrict their right to record songs they've recorded for labels in the past] have long ago expired, so a lot of them will re-record old material. Some of them make a lot of money from advertising uses, and the recordings can also be used for [master] ringtones.

There are also a lot of independent companies doing more independent things in this area. Even unsigned artists whose music is considered "cool" are getting offers to record ringtones.

What's happening with independent companies?

A lot of creative people are forming production companies because it's harder to convince majors to sign artists just because they sound good. The artist may be developed by a producer, another artist or a songwriter. The artist is then turned over to a major.

I've done a ton of those deals over the past year. Production companies have been around for some time, but there are a lot more of them now. If you're a name producer, the label will be a lot more interested in the artist.

I think it's a healthy trend because developing an artist through a production company results in a lot more interesting music created and takes the pressure off the labels to have the A&R people figure out creatively what's supposed to happen. It's also much cheaper to make a record this way, especially for people who have their own studios.

There's a lot less imagination at the labels now because they can't really afford to have too much imagination. The labels have to understand what they're getting. For example, they used to test a particular track to see if it's the right single, but now I'm seeing a lot of testing even before the label signs an artist.

What do you think about the movement that wants Congress to require compulsory licenses when online companies cannot locate publishers or labels to obtain rights?

I don't think too much compulsory licensing is a good thing. The market ultimately produces the right rates.

For example, with ringtones, people are realizing that there is money to made, and we're starting to see some standard terms.

This doesn't need to be handled on a compulsory basis, although it may end up that Congress has to set it up. A lot of creators feel uncomfortable about digital versions being available where their music can take on an infinite life.

They have the right to control whether their music is disseminated that way. Some people will either get hungry for the money you can make off digital distribution of their music, or they may feel left behind in terms of notoriety and begin making their music available. But they should not be compelled to let people use their work that way.

On the other hand, there is a need to keep consumers getting what they want so they'll be responsible about buying it rather than stealing it. If you have only half the music somebody might conceivably want on a particular download service, you have to wonder if that's a good thing or a bad thing for the music industry -- whether people will then steal the music they want.

Questions? Comments? Let us know: @billboardbiz

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