updated 01:10 pm EDT, Fri April 28, 2006
Sony sued for royalties
Sony is being accused of underpaying music artists' royalties for digital downloads in a new class action lawsuit. The Allman Brothers Band and Cheap Trick are claiming millions of dollars in damages from Sony Music because the entertainment giant is not paying its recording artists half of the net licensing revenue received in connection with music licensed to digital download providers, such as Apple. The suit alleges that Sony Music handles each download as a sale of physical media, paying on only 85 percent of "sales" due to "breakage of product," and deducts another 20 percent for container/packaging charges associated with the digital downloads. Finally, Sony Music is reducing its payments by another 50 percent for an "audiofile" deduction, which results in a payment to recording artists of roughly 4 1/2 cents per digital download, according to Macworld UK.
"Sony Music is presently engaged in a widespread attempt to underpay its recording artists; 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," said Brian Caplan, an attorney associated with the action.