Allman Brothers and Cheap Trick, two veteran bands signed to the record label giant Sony Music, have sued that label today for failing to pay sufficient royalties for digital downloads from services like iTunes and Napster. The digital download business is growing at increasing speeds, with Apple's iTunes having sold over 1 billion downloads to customers. However, some artists are very unhappy with what they receive for the sale of their work from the world's largest record companies.
"Sony Music is presently engaged in a widespread attempt to underpay its recording artists," attorney Brian Caplan said in a statement. "With the technological advancements in the music industry, where many people download songs to their iPods and other portable devices, it is essential that artists receive the royalty income to which they are entitled." Specifically, out of every 70c Sony is making per download on iTunes, the artists are only receiving a minuscule 4.5c.
The complaint challenges this rate, saying that artists are entitled to a payment around 30c instead. It all boils down to whether a digital download can be considered comparable to a CD sale, which the labels believe it is, but the artists believe it is more on par with licensing music tracks for motion pictures. According to Bob Kohn, founder of indie digital-music store eMusic and now CEO of royalty processing service RoyaltyShare, contracts signed by artists in the past five years should clearly stipulate how digital downloads are treated.
He added however, that older contracts such as those signed by Allman Brothers or Cheap Trick may not. He said newer contracts treat digital downloads like CD sales and allow for lower royalty payments. "This kind of dispute arises every time a new technology arises," Kohn said. "It happened when piano rolls were invented, when motion pictures were invented, when TV was invented, and when videocassettes were invented, and now it's happening with digital downloads."
Source:
MP3.com
The complaint challenges this rate, saying that artists are entitled to a payment around 30c instead. It all boils down to whether a digital download can be considered comparable to a CD sale, which the labels believe it is, but the artists believe it is more on par with licensing music tracks for motion pictures. According to Bob Kohn, founder of indie digital-music store eMusic and now CEO of royalty processing service RoyaltyShare, contracts signed by artists in the past five years should clearly stipulate how digital downloads are treated.
He added however, that older contracts such as those signed by Allman Brothers or Cheap Trick may not. He said newer contracts treat digital downloads like CD sales and allow for lower royalty payments. "This kind of dispute arises every time a new technology arises," Kohn said. "It happened when piano rolls were invented, when motion pictures were invented, when TV was invented, and when videocassettes were invented, and now it's happening with digital downloads."
Source:
MP3.com
