SONY MUSIC ENTERTAINMENT is being being taken to court by the producers AMERICAN IDOL, in a lawsuit that claims SONY underpaid royalties for digital streams of music by KELLY CLARKSON, CARRIE UNDERWOOD, CHRIS DAUGHTRY and other music from the show’s first seasons.
THE NEW YORK TIMES reports, “the suit, which asks for $10 million in damages, was filed by 19 RECORDINGS and is the latest in a series of lawsuits over online royalties in recent years. In the most prominent of these cases, a group of producers behind EMINEM sued the UNIVERSAL MUSIC GROUP in 2007, saying that UNIVERSAL had incorrectly counted downloads through online stores like iTUNES as ‘sales’ rather than as ‘licenses,’ which usually yield a much higher royalty rate.”
These kinds of cases are becoming common. Earlier this week, WARNER MUSIC GROUP settled an $11.5 million settlement in a class-action suit with its artists over downloads.
THE TIMES notes, “the AMERICAN IDOL suit, filed in UNITED STATES District Court in MANHATTAN, says that SONY improperly characterized plays on streaming services as ‘sales’ or ‘distributions’ rather than as ‘broadcasts’ or ‘transmissions.’ According to the suit, broadcasts or transmissions from streaming are entitled to a royalty rate of 50% of SONY’s net receipts. Royalties from sales can vary widely according to each artist’s contract, but are typically between 10 and 20%.”