Los Angeles Entertainment Litigation Attorney Notes Uptick in Digital Music Revenue Disputes
Los Angeles, CA (Law Firm Newswire) April 30, 2012 – A substantial amount of money may soon be tendered to pay for the outstanding claims made by recording artists for monies owed to them from digital sales of their music.
Sony BMG has agreed to a settlement of $7.95 million for musicians such as Cheap Trick, The Allman Brothers, and The Youngbloods along with thousands of other class members. This deal will also give a 3 percent increase to their artists’ royalty rates for digital income.
“The courts have determined that digital downloads should be recognized as a license, not a sale,” said Los Angeles entertainment litigation attorney Anthony Spotora. “It took five years for this Sony BMG battle to reach a potential settlement and other upcoming cases will bring this issue of digital downloads even further to the forefront.”
If the settlement is approved, Sony will give a large portion of it to musicians who had 28,500 or more downloads from iTunes. Class members could go into the thousands as the settlement covers musicians who signed contracts from 1976 to 2001, and some monies will even go to artists that do not have significant downloads. Many of the older musicians do not have express rates, or contract clauses for digital downloads. When the judge approves of the settlement terms, it will legally bind qualifying Sony BMG recording artists unless they choose to expressly opt out.
“iTunes has sold multibillions worth of downloads and that is just a part of the digital download revolution,” said Spotora. “These cases could get the artists a fairer share of what is owed to them. But in entertainment litigation, the wait can be long and an uphill battle, and thus the need for aggressive legal representation to uphold your rights.”
In April, a district court will hear the case that was handed back to them from the Ninth Circuit Court of Appeals regarding F.B.T. Productions, Eminem’s producer, to determine what is owed by Aftermath Records, a Universal Music Group subsidiary. The record label treated Eminem’s music as a sale, not a license, and Aftermath could be on the hook for more than $3.8 million.
Other music artists such as Rob Zombie, Sister Sledge, and Kenny Rogers have alleged they have been underpaid substantial amounts due to improper revenue calculations. When digital music purchases are treated as licenses, artists can get a 50-50 split rather than sales that typically give them 10 to 20 percent of the revenue.
“All these cases have big implications for musicians and the industry,” said Spotora. “Digital downloads are here to stay, so everyone is keeping tabs on how this will all shake out.”
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