How do you like this one Sony?

[kosmo vinyl]

http://www.mp3.com/news/stories/4310.html
 
 Allmans, Cheap Trick sue Sony
 By Jim Welte, MP3.com
 April 27, 2006 at 03:35:00 PM | more stories by this author
 
 Veteran bands claim label giant isn't giving them their fair share of digital-download revenue from stores such as iTunes.
 
 The digital-download business is booming, but the Allman Brothers Band and Cheap Trick claim they aren't getting their fair share of the pie.
 
 The two veteran rock bands sued their label Sony Music today, charging the music giant with not paying them the required percentage of net licensing revenue it receives from Apple's iTunes and other digital-download stores.
 
 "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."
 
 The class-action lawsuit claims that the artists' contracts require Sony to pay its artists about 30 cents out of every 70 cents it gets for digital downloads--out of a total of 99 cents that iTunes charges per song. But the complaint maintains that Sony is only paying artists 4.5 cents for each song.
 
 The case hinges on whether a digital download is comparable to a sale of a CD, as the labels contend, or more on par with a license of a song for use on a movie soundtrack, for example, as the artists claim.
 
 Bob Kohn, founder of indie digital-music store eMusic and now CEO of royalty processing service RoyaltyShare, said that contracts that have been signed in the past five years should clearly stipulate how to treat digital downloads, but that older contracts for veteran bands such as the Allman Brothers or Cheap Trick might not. He said newer contracts treat digital downloads like a CD sale and thus allow for the smaller payments to artists.
 
 "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."
 
 Sony officials did not return a call seeking comment.

[kosmo vinyl]

LA Times
 
 Two of the bigger rock bands of the past are suing over the future of their music.
 
 In a lawsuit filed Thursday in New York, the Allman Brothers Band and Cheap Trick allege that they and other groups are being shortchanged by Sony Music, a division of music giant Sony BMG, as digital music downloads explode. The suit seeks class-action status.
 
 Both bands contend that when Sony Music sells downloads of their songs through such services as iTunes, it amounts to the licensing of their music, not its distribution, entitling them to more generous royalties. Currently, the lawsuit says, Sony Music accounts for such sales as "physical phonorecords," deducting a 20% fee for packaging even though downloads are electronic.
 
 The suit also alleges that Sony Music deducts 15% of revenue for "breakage" as it would with a CD or cassette.
 
 As a result, the suit contends, bands should receive 30 cents of the 70 cents Sony Music collects when a digital song is sold. Instead, they receive only 4.5 cents, the bands allege.
 
 "Sony Music is presently engaged in a widespread attempt to underpay its recording artists," band lawyer Brian Caplan said. "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."
 
 Sony BMG declined to comment.
 
 The Allman Brothers had such hits as "Ramblin' Man" and "Whipping Post." Cheap Trick's hits included "I Want You to Want Me" and "Dream Police."

[kosmo vinyl]

As pointed out on the eMusic message board... Record Companies tout iTunes, etc as services which benefit the artist not the labels.  Maybe major record labels really do need to go away