May 8, 2006

Attorney Steve Gordon has a post at Digital Music News about the Cheap Trick/Allman Brothers lawsuit against Sony BMG that claims underpayment for digital sales. The lawsuit hinges upon the type of sale that is derived from the purchase of a digital download. Sony BMG calls it a sale, the plaintiffs call it licensing.

"The plaintiffs maintain that the artists should get half of that amount. But instead, the complaint alleges, Sony treats downloads as record sales even though the label does not sell anything to the digital download services including iTunes. Rather, the complaint alleges, Sony is “licensing” their masters, including those by Cheap Trick and the Allman Brothers, to download services in exchange for a royalty of 70 cents."

What's at stake here? Only the continued belief that digital downloads will help cover the loss from CD sales' slide. If labels' digital sales all of a sudden start contributing less to the bottom line, everybody -- from execs to investors, but certainly not artists -- will lose some interest in digital music.

To listen to a broadcast on this particular topic, go to Steve Gordon's The Future of Music page at MyRealBroadcast.com and click on "Recent Shows - Press Here."

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Posted by Glenn at 12:36 PM | | | Legal | Sony BMG Royalties Lawsuit