... and other labels do it too.


Allman Brothers, Cheap Trick Challenge Sony BMG Accounting

The Allman Brothers and Cheap Trick have recently lodged class-action
proceedings against Sony BMG, claiming that their digital royalties are
simply too small. The action focuses on exactly how digital downloads are
being counted, and both bands are alleging that Sony BMG is using antiquated
royalty formulas derived from physical product sales. That includes
deductions for product breakage and packaging charges, according to the
plaintiffs. The contracts for both groups were finalized prior to the advent
of digital formats, and have not been updated. Moving forward, the groups
are pushing to have their digital sales categorized as a license, which
would increase the royalty percentage substantially.

The problem is a significant one for older artists, many of whom have
antiquated contracts. "Sony Music is presently engaged in a widespread
attempt to underpay its recording artists," said attorney 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." The filing contends that the group currently earns $45.05 for
every 1,000 songs downloaded, or 4.5 percent. The group is pushing to
increase that compensation level to $315.50, a seven-fold increase. The
lawsuit was announced on Thursday.