Both REO Speedwagon and Boz Scaggs are suing Sony Music for unpaid royalties.The litigation comes during the debate of how artists are compensated after consumers buy songs on iTunes and other digital outlets.
“Both plaintiffs say that Sony has breached recording contracts by counting digital downloads as ‘sales’ rather than ‘leases’ or ‘licenses.’ As a result of this accounting treatment, the artists allege they haven’t been paid appropriately. The royalty rate on a sale is around 15 per cent compared to a ‘licence/lease’ which is 50 per cent,” states The Hollywood Reporter.
REO Speedwagon of “Keep on Loving You” fame claims Sony Music Entertainment owes them at least $150,000 on royalties (plus a judgment ordering Sony to pay 50 per cent of net receipts for leased music, including licensing for ring tones and downloads) for music licensed to iTunes, Amazon.com and Verizon.
Under the band’s royalty structure in their 1981 recording agreement with CBS Records, Sony’s predecessor, the band claim “Sony was supposed to pay 50 per cent of its net receipts for any master recording Sony licensed to others for distribution in the U.S,” according to Courthouse News Service.
William (Bozz) Scaggs, too, wants $150,000 from Sony for unpaid royalties and is suing for breach of contract and declaratory judgment. The singer even opted out of a class action lawsuit, Shropshire v. Sony Music Entertainment, earlier this year to pursue his own legal action.
Scaggs’ recording agreement dates back to 1976 with CBS Records, but Scaggs is arguing that Sony has failed to pay him the proper royalties since the beginning of 2009.
But this isn’t the first time Sony has had to face the music.
Last March, Sony seemingly resolved litigation over digital downloads by coming to an $8 million settlement with several musicians, including The Allman Brothers, Cheap Trick and The Youngbloods.
But recently, a 2010 decision by the Ninth Circuit Court of Appeals that suggested that digital downloads be considered “licenses” has led to numerous artists seeking a greater cut.
REO Speedwagon, who boast 13 Top 40 hits, and Skaggs, with six Top 40 hits, have now both jumped on the bandwagon.
In case you need a refresher on the musicians, check out REO Speedwagon performing their hit “Keep On Loving You” below:
And Boz Scaggs with “Lowdown”:
But it’s not just Sony facing legal troubles, James Taylor is suing Warner Bros. for $2 million in damages >
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