Court Refuses To Dismiss Allman Bros. Lawsuit Against UMG; iTunes Royalties At Stake
from the a-license-or-a-sale? dept
There have been a number of lawsuits over the past few years from artists who are complaining about how the major record labels account for iTunes sales. The question is whether or not a song sold on iTunes is the same as a CD sale (a tiny tiny royalty) or more like licensing a song for a commercial (more like a 50% royalty). Obviously, the record labels want iTunes treated like a CD. But musicians have a reasonable argument that an iTunes sale may be a lot more like a typical license, as a big part of the reason in the discrepancy in the royalty rates is that there's no (expensive) physical packaging and distribution to handle. The Allman Brothers were one of the first to file lawsuits on this issue suing both Sony Music, and then a couple years later, Universal Music Group (I'm still not clear why they sued the two separately, years apart). Eminem also had sued UMG over this issue and lost, as a jury said iTunes was more like a CD sale.UMG tried to get the case from the Allmans dismissed, but davebarnes alerts us to the news that the court has refused to dismiss the case, and it will proceed to a full trial. Of course, like Eminem, the Allmans may lose the trial, but it's better than having the case dismissed outright. Of course, if the Allmans win, it will create a bunch of similar lawsuits in short order, as pretty much every artist will be demanding a lot more iTunes revenue.
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Filed Under: allman brothers, itunes, licensing, royalties, sales
Companies: universal music
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good and bad from this
So, what I see happening is the artists get more money, something like 50% of net revenues instead of the couple percent they get now. Now the labels want to charge $2 per track instead of $1 so that they earn the same amount. People say screw this and go back to pirating the music more than ever. The labels then go crying to congress demanding help and either A) try to force mandatory drm on, well, everything or B) a CD tax like canada on anything that can be used to store music. CDs, mp3 players, flash drives, hard drives, etc or C) a $5-10/mo tax assessed on every household or possibly x amount per GB of transfer.
But maybe I'm just being pessimistic.
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Re: good and bad from this
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Re: Re: good and bad from this
No.
Operating systems, by themselves don't play music. It's the programs running on top of operating systems that do the playing.
And no.
Taxes in B cover storage media not computer applications that actually use what's stored.
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Re: good and bad from this
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Re: Re: good and bad from this
One HUGE middle man is cut out and artists still make money because although the pie is smaller (theoretically and only according to the RIAA), they don't share as much anymore.
Yay for efficiency right?
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Re: good and bad from this
or d) institute a VOLUNTARY blanket license that allows consumers to acquire media in any fashion that they desire for non-commercial use completely legally so long as their license is current.
licenses are sold annually or monthly and the funds collected are distributed to labels, ascap, and all the other royalty groups.
media companies can continue to snoop peer to peer networks looking for people to sue, but now they must prove that the defendant did not have a valid license at the time of the alleged infringement. the labels and studios can continue to screw artists just like they always have, and i can continue to download everything i want from bit torrent, only now i don't have to deal with private trackers, run blocklist tools and tunnel my traffic because file sharing is legal as long as you have a license to do so. this will mean faster transfers, more seeders, and a more active file sharing community.
since the blanket license is voluntary, people who buy hard drives or blank CD's don't have to pay taxes, people who buy CDs or stuff from itunes can continue to do so unimpeded, and the underground and warez scene types can keep doing what they do.
i call this the piracy pass. i keep doing what i do, they keep doing what they do, and i pay for the convenience of being able to do my thing in the open.
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I think...
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gee, I wonder what will happen
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The other is that "buying" that music doesn't actually mean that I own it...
Solve those two problems and I'll start getting interested in the deal.
In fairness to both sides, the problem here is that a download "sale" is neither the same as a traditional physical sale, nor the same as a licensing deal. It is dissimilar to a physical sale in that there is no production, storage or supply of physical goods. It is dissimilar to a licensing deal in that a licensing deal will generally be part of a marketing deal, to promote the song, or to promote goods by using the song, whereas a downloadable product release still requires a traditional marketing effort (in the case of those albums that actually receive one, at any rate).
I'd guess, but haven't researched, that the Eminem judgement came down to there only being two remuneration deals in the artist's contract, and that the download "sale" was more similar to an album sale than a licencing agreement (the fact that a download "sale" is a licensing agreement, and not a sale notwithstanding).
As I say, I still won't be "buying" from any of the download services until my "purchase" becomes something more concrete and meaningful than the current hellspawned, DRM-laden mess that it would be currently.
Plus, I can still get hold a post-purchase-value-retaining physical copy of an album for less than the download price of the same music.
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This is very disappointing
The optimum scenario for artists is maximum exposure.
The optimum scenario for the recording industry is money.
BMI, ASCAP, and SESAC have already choked businesses playing music in public environments with their fees... do artists get a nice slice out of that?
The music industry was already crying about how the Internet killed radio, etc (not true at all). Along comes a company that brings MASSIVE and ... legal Internet exposure to the industry - and they want to kill it by extracting yet MORE money from the buyers.
Writers went on strike to get more money out of DVD sales... but they didn't do anything new or different to be compensated. They were already compensated for the writing. The company that took risk producing the DVD went out on a limb. They took great monetary risk to roll that movie out to the public. If it flops... where is the writer? Do they take a hit? Nope. They just collect more if the company's risk is successful. Nice position to be in.
The industry has pretty much choked new artist exposure in today's world via satellite and radio. I would think most artists would love that a larger audience can gain exposure to them via iTunes and the like.
If they double the price, that's when I will reach my tipping point. I no longer listen to commercial radio - because it's terrible. Short playlists, loaded with commercials... I suspect my college age daughter will do likewise. Stop buying. There are a lot of options in today's world. I'm getting tired of industry holding me hostage.
Did the Allman Brothers do anything new to gain this new source of revenue? Were they not already compensated by producing the music in the first place? Should photographers continue to get paid each time their photograph is used? (I am aware some are - but not the one's we hire). At what point does one get paid a fee for service, and that's the end of it?
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Re: This is very disappointing
It does boil down to money, but I bet they don't see it as an increase to fans. They're probably assuming (incorrectly) the industry will absorb the loss, and not increase overall price.
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Re: This is very disappointing
Um, NO. They probably have a contract that states something to the effect that they make some percent of CD sales (usually in single digits) and some larger percentage (usually as much as 50%) on licensing deals. To use your photographer analogy: You hire the photog to take a picture that you use in promotional materials like brochures, that is like the licensing deal, so it is a larger amount of money for a one time sale. Let's say you also sell snapshots or postcards of the photographers work, this is like the CD sales.
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Neither one fits
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If this Lawsuit by the Allman Bros is a won ....
Go Allman Bros Go !!!!
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