Follow Slashdot stories on Twitter

 



Forgot your password?
typodupeerror
Check out the new SourceForge HTML5 internet speed test! No Flash necessary and runs on all devices. ×

Rockers Sue Sony Over Download Royalties 360

Ohreally_factor writes "According to an AP article, groups Cheap Trick and The Allman Brothers allege that Sony is paying them less than what they deserve for music downloaded from popular download sites such as iTunes. Because Sony counts such sales as the equivalent of a physical phonorecording sale, they deduct costs for packaging (20%) and breakage (15%) from the artists' royalties, just as they would if they were selling CDs through more traditional means. Seeing as how there is no physical packaging, nor physical inventory that might suffer breakage, one wonders how Sony will defend against these charges."
This discussion has been archived. No new comments can be posted.

Rockers Sue Sony Over Download Royalties

Comments Filter:
  • such sweet irony (Score:5, Interesting)

    by yagu ( 721525 ) * <yayagu AT gmail DOT com> on Friday April 28, 2006 @04:35PM (#15223608) Journal

    I want you to want me. I need you to need me.

    What a tasty irony one of the first incidents of the artists awakening to the double-edged sword that is the music industry's abuse is from a band named Cheap Trick!

    From the article, assuming it's accurate and correct, what a staggering number each 99 cent sale of a Cheap Trick song nets Cheap Trick a paltry $.045. That's internet highway robbery.

    I never thought about it this way before, but maybe a to date unreckoned force that could be brought to bear is the ire of scorned artists. Maybe, just maybe, in its seemingly infinite greed the record industry finally goes a bit (or bits) too far and the slumbering artists wake up and smell the corruption. Probably a bit of a pipe dream, but I'm pulling for Cheap Trick.

    • by quokkapox ( 847798 ) <quokkapox@gmail.com> on Friday April 28, 2006 @04:41PM (#15223663)
      Typical Sony Bull$hit. Me and my band, $sysR00TK1T, tried to get a recording contract with Sony, we sent them a demo tape, but they didn't even notice.
    • Re:such sweet irony (Score:5, Interesting)

      by TWX ( 665546 ) on Friday April 28, 2006 @04:47PM (#15223725)
      Established artists that actually have some money should get smart and start re-recording their classic songs themselves without corporate money, so then they have completely independent music to sell.

      Granted, they'd have to make the remake sound a lot like the original, and they'd also have to find a way to market their version through the Internet where it's higher-profile than the industry-owned tracks, but if they could find a way to get the Internet retailers to start classifying the existing industry stuff with names like "Sony/BMG/Cheap Trick" for the artist field and just "Cheap Trick" for the new recording it just might work...
      • by iminplaya ( 723125 )
        Established artists that actually have some money should get smart and start re-recording their classic songs...

        Most of them don't own their classic songs. The publisher does. The artists are probably not authorized to sell the work they created. They sold their souls, and now they must deal with it. That's your copyright dollars at work.
        • Re:such sweet irony (Score:5, Informative)

          by Ohreally_factor ( 593551 ) on Friday April 28, 2006 @05:18PM (#15223970) Journal
          You're partly right, but partly wrong.

          The reason a recording artist can't just re-record an album with a different record company is because the recording company has secured the mechanical rights, i.e., the recording rights.

          Let's back up here. When someone creates a song, they own the copyright to that song. The copyright can be divided into component rights, i.e., publishing rights and mechanical rights. Recording companies do not generally try to buy the publishing rights from the artists, although there are certain exceptions to this*.) Generally, a songwriter will keep the publishing rights, and make a royalty every time the song is purchased or publicly performed.

          *The most famous exception is the Beatles' catalog, which is not owned by their record company Apple Corp., but jointly by Michael Jackson and Sony. Apple Corp still holds the mechanical rights, however.
          • by PCM2 ( 4486 ) on Friday April 28, 2006 @07:46PM (#15224828) Homepage
            The reason a recording artist can't just re-record an album with a different record company is because the recording company has secured the mechanical rights, i.e., the recording rights.
            While some of what you say is mostly true, mechanical rights do not equal recording rights. They represent the record company's rights to a particular recording. So, while you cannot take your master tapes and put out the same recording on a different label, if you own the publishing rights there should not be anything stopping you from re-recording your old songs and releasing them on a new label. I believe the only reason this does not happen more often is because albums with "no new material" do not typically sell all that well, so labels aren't all that interested in them. They'd prefer you record brand-new songs. But it does happen. The skatecore band Suicidal Tendencies, for example, re-recorded their entire eponymous debut album and released the new versions of the songs on a new label under the title [amazon.com]"Still Cyco After All These Years." [amazon.com]
          • Re:such sweet irony (Score:5, Informative)

            by DannyO152 ( 544940 ) on Friday April 28, 2006 @09:02PM (#15225188)

            I'm going to disagree with you. For compositions in the US there is a statutory mechanical reproduction (pressing the disk in old school terms) fee. Any one who pays this can record the song and sell the disk. The songwriter holds a "first-performance" right which may be granted to someone else on a negotiated basis, but once the song is recorded, any one can record that song without asking permission -- they just have to pay at pressing time. The recording company holds a copyright on the publishing of the performance, i.e., the disk.

            Now, bands that were kinda successful (or not succesful at all) may still owe advances to the recording company. And the contract may require that any new labels reimburse the old label for the advances and that would put a damper on a re-do.

            Songwriters of the Beatles era keeping their publishing was not as common as you make it out to be. And the money the songwriters get from the disk occurs not at sale but at pressing. Glossing over some of the ways people screw artists, for every $1.00 received as publishing revenues (commercial radio and live performances [collected by performance rights societies, such as ASCAP], inclusion on film soundtracks, advertising placements, sheet music sales) $.50 goes to the songwriter and $.50 goes to the publisher. The specific publishing deal may mean the songwriter also gets a bit of the publisher's $.50. The more successful the songwriter, the greater a piece of the publisher's $.50 the songwriter may get.

            As far as copyrights go, there's nothing to prevent a band from rerecording its repetoire on a new label. The old record company only holds rights to the original masters, via the recording contract, the right to sell the disks in the warehouse, and the right to press more disks from the masters. Seems to me, five years ago or so, Prince was on the verge of re-recording his songs until he and Warners came to an understanding and Prince bought back his masters. I know I own some disks where 50s and 60s era artists re-recorded their hits years later for a different label.

            Now the original packaging is the property of the old record company. So if we're being old school and talking about product in stores, this band would have to pay for original packaging and find a distributor who is willing to distribute what is duplicative product which will be placed side by side next to the originals (assuming the old company hasn't put the catalog out of print). So good luck with that. Of course, the packaging and distribution problems dissipate if we're thinking about mp3s via internet download only.

            So, copyright doesn't interfere with the redo the repetoire plan in the mp3 age. Are there any other impediments? Well, recordings can be difficult to duplicate. The studio may be gone. The room may have lost its acoustic signature. The budget, in relative terms, may have been higher when the record company was cutting the checks (even though the costs were recouped from royalties). Digital sounds different than analog tape. Engineers are exercising different skill sets. Plus, who wants to listen back to the playback and say "25 years later and we play it just the same." Regarding those re-did disks I mentioned above: the originals were better, despite the new ones featuring real stereo recordings on better requipment with better musicians. I'll conclude with this note: with the arguable exception of the 1969 Memphis recordings, Elvis sounded best when he was young and hungry and in Sam Phillip's house at Sun. Some moments are quintessential; they don't last and they don't come back.

        • Re:such sweet irony (Score:4, Interesting)

          by Rei ( 128717 ) on Friday April 28, 2006 @05:23PM (#15224009) Homepage
          They get royalties. Of course, ripping content creators off on royalties is a classic business.

          For the publishing industry, there's an entire accounting firm in New York City that makes its money simply by auditing the books of publishers at no charge. If an agent thinks that their author is getting ripped off on royalties, they have the company audit the publisher for free. The company gets paid a percentage of the unpaid royalties that they find for the agent/author, and nothing if there weren't any unpaid royalties.
      • Granted, they'd have to make the remake sound a lot like the original

        Not necessarily. There are a lot of people who like good live music tracks without all the synthetic hoolaboo. Or, I. Ron Butterfly could come out with a super-long extended cut of In-A-Gadda-Da-Vida to sell on the web.

        • Super long extended version of In La Godda Davida? Isn't the original 18 minutes long? And contains only about 20 words? (Some nice solo instrumentals on it, but still....)
      • They have sold their copyrights to the songs, as well as publishing rights. (C) and (P) respectively. They would be sued by the record company for trying to sell a song with lyrics that resembled a song they sold the rights. I can't believe this got moderated +5.
        • Please, go learn some basics about I.P. law in America.

          ALL rights that someone has to a creative work that is not a mere identifier and not a mechanically novel creation are copyrights. A musician's only rights to their music are copyrights.

          The start of the confusion, which is easy to make, is that a typical mass-media song has at least three distinct inter-related works, all with potentially different copyrights. First you've got the copyright on the song itself -- the sheet music, if you will --, then t
      • Cracker, a not too terrible band famous for a song called "Low", recently did this. Their old contract allowed Virgin Records to create a Best Of album and not give any royalties to the band.

        They had rights to the songs, but not the recordings. So they re-recorded all of the songs on the Best Of album as exactly as possible, threw in a bonus track about their experiences with their label ("Ain't Gonna Suck Itself"), and sold it for less than the Virgin "Best Of" album. Due to their small but devoted and inf
    • Re:such sweet irony (Score:5, Interesting)

      by hackstraw ( 262471 ) * on Friday April 28, 2006 @04:52PM (#15223757)
      From the article, assuming it's accurate and correct, what a staggering number each 99 cent sale of a Cheap Trick song nets Cheap Trick a paltry $.045. That's internet highway robbery.

      The FA also says: "Tracks sold over the Internet usually go for about 99 cents. About 70 cents of the sale price goes to Sony. The bands are getting about 4 1/2 cents per song, according to the suit, rather than the approximately 30 cents they claim is rightfully theirs."

      I'm not sure if the band's cut is out of the Sony cut or what, but Sony getting 70% of the money seems excessive. Remind me why artists need companies like Sony? Especially known bands.

      • I'm not sure if the band's cut is out of the Sony cut or what, but Sony getting 70% of the money seems excessive. Remind me why artists need companies like Sony? Especially known bands.

        And especially since the cost of distributing the song over the internet is next to nothing anyway.

        • by hackstraw ( 262471 ) *
          And especially since the cost of distributing the song over the internet is next to nothing anyway.

          How about zero, at least to Sony, et al. In the case of the iTunes store, Apple is the one paying for the bandwidth and the store maintenance, etc. Sony is getting 70% because they suckered some 20 something into a deal 20+ years ago.

      • Re:such sweet irony (Score:3, Informative)

        by Rei ( 128717 )
        It's not just confined to the music industry. The content creator in any medium tends to be the first to get ripped off.

        For example, look at book publishing. Stores (especially large chains) have sweet deals. A book doesn't sell? Send it back, no cost. But if that's not enough, the large chains get discounts to carry books. They sell it to you at the cover price so that they get a larger profit margin than indy bookstores. In short, large chains rip off the publishers.

        The publishers started looking a
      • For one it's Sony who make them known.

        Sony is just a distributor/publisher. They need content and screw over the content makers so that they [Sony] become the content.
        How else are you going to get 11 albums for a penny?
        I personally think the artists should make at least 50% on the deal and no less.

        True story, a long time ago, a coworker made up 3 fake people and used the identies to get the free cd's that the columbia club offered and had them delivered to the office. When he didn't pay, they offered more
        • I used to do that to get free magazine subscriptions in my teen and college years. Later, in the working world, I started receiving more trade magazines than any 20 people could possibly read in a month.

          When I finally got a laptop with wireless and could use it for all my bathroom reading, I canceled those subscriptions.
      • Remind me why artists need companies like Sony?

        Because artists want to quit their day jobs and become OMGROCKSTARS right now.[*] And the only people willing to fund something like that are companies like Sony.

        ----------

        [*]In reality, "right now" usually means "several years of back-breaking work". But think about how much longer it would take, and how much less fame and fortune rock stars would achieve in a lifetime, if they had to pursue their rockin' careers while keeping their day jobs. Nobody wants t
      • for one, the arctic monkey's didn't.
        Who?

        "The first album from indie band Arctic Monkeys has become the fastest-selling debut album in UK chart history."

        http://news.bbc.co.uk/1/hi/entertainment/4660394.s tm [bbc.co.uk]
      • by SatanicPuppy ( 611928 ) <Satanicpuppy@@@gmail...com> on Friday April 28, 2006 @05:44PM (#15224157) Journal
        I can't help but think that, as self publishing and self publicizing becomes more doable, that there is no way that the old model of the recording megacorps can continue to hold up. It's just not sustainable.

        I've been thinking about the whole packaging/transport/etc issue for a while, because iTunes throws the whole deal into a clear perspective. As far as Sony and others are concerned, it costs the same to disburse 12 songs on a CD as it does to disburse them digitally. But obviously that can't be the case, therefore online music is overpriced.

        Add into that the fact that the artists still aren't getting anything like their fare share of the profits, and you get a real good insight into how crooked the business really is. All these things, how much shipping, and breaking, and band publication costs, taken as fact by the artists, and supported by the available business records of the industry...Clearly they're cooking the books, at least in terms of online sales, and if there, then why not other places?

        I don't see the RIAA lasting. I just don't see how they could. They can't monopolize distribution. Social networking sites make it very easy to self-publicize things like music. Convert venues can decide for themselves if the bands are worth hosting. What else is there? The CD market is on the way out, that's just inevitable. It's a dead-end format and they restrict it more all the time.

        People always talk about the buggy whip manufacturers, but the difference is, some people felt bad when the buggy whip manufacturers went out of business.
         
      • Re:such sweet irony (Score:4, Interesting)

        by cpt kangarooski ( 3773 ) on Friday April 28, 2006 @06:49PM (#15224549) Homepage
        Well, the main service that publishers of any sort provide is money.

        If you want to go from having a band all the way to having a CD in stores, you'll need money to live on, to rent any instruments you need, to rent a recording studio for the time it takes to make the recording, to hire engineers to run the studio equipment for the recording, to create the master, to press a run of CDs, to design the cover art, to package the CD, to ship it to stores, and to advertise it. If you want to promote it by going on tour, you'll need money to do that too.

        You'll also probably want contacts in the industry. Sure, members of a band could take the time to learn what the best studio in their price range is, who to get as an engineer (and who to settle for if they can't have their first choice), where to get the best deal for making the CDs, who to convince to get chain stores to stock albums, how to get reviewers to actually listen to the CD, etc. But if there already is someone available who can do this, it may be more efficient to take them on as a hired gun.

        Of course, publishers could spend these resources on a band, or they could just invest their time and money in stocks. They're going to treat the band as just another investment, ultimately, which means that they want to make the greatest profit, and have that profit be more than they'd get from their best alternative investment.

        As it happens, most bands end up not selling enough to recoup costs, or don't sell enough to make a bigger profit than the best alternative. They are bad investments, and the labels lose money on them. The same is true elsewhere too; books, movies, whatever. The idea is that a rare handful of the works being created will be such spectacular success that it will not only yield a great profit, but that the profit will cover the money lost on all those other, failed bands. And just to make sure, the publisher might want a contract for several works, so that if there is a success, it can not only exploit it for all it's worth, but if the band has staying power and isn't a one-hit wonder, it can keep pulling in the money. While this isn't perhaps the most efficient way of doing things, the unpredictability of the market rather necessitates it, and it seems to work okay, if you're careful about watching your expenses.

        Anyway, now we get to the main reason why some of your friends are, as the man said, already this fucked.

        If you are a musician and you are offered a fairly ordinary record contract, you have the options of rejecting it, making a counter-offer, or accepting it.

        If you reject it, then you just keep on doing what you're doing. The label will not give you the money you need to finance your career, and you probably either have to get a regular job, relegating music to a hobby, or live a rather poor life.

        If you make a counter-offer, the label probably rejects it. After all, there are tons of musicians that would love to get a record label, and won't make waves. If you will not take the deal offered -- the deal that overwhelmingly favors the label -- then you'll get no deal at all.

        In both cases, maybe you can scrape up some cash, or find a more amicable label to finance you, but it's not common.

        Or you can accept, in which case, you get a lousy deal but a lot of money to make a go for the brass ring. Probably you flop, and your career is shot, at least for a spell. The label lost money on you, and while you don't have to repay it, you have the stigma of a bad investment. Or, maybe you become a hit -- a lasting hit -- and can quickly pop out a few albums to fulfill your lousy contract, and negotiate a new contract from an infinitely stronger bargaining position. For while there are plenty of untried musicians, there are not many proven successes. But the odds of this are actually quite low. Basically, the chances of becoming enough of a star to get rich are like winning enough in the lottery to get rich. Most people might fantasize about it, but in the end it's probably better
    • by Anonymous Coward
      That's internet highway robbery.

      Must resist urge... will to resist fading... NNOOOOO!!!!!

      More like information superhighway robbery!
  • by DaHat ( 247651 ) on Friday April 28, 2006 @04:37PM (#15223620) Homepage
    Such it Blue!... errr Suck it Sony!

    Granted we shouldn't be taking pleasure in the legal issues of such a large company... it is nice to see their business model faltering even more.

    First the rootkit now this, the question in my mind is now: "What will be next?"
  • Sony (Score:5, Funny)

    by Anonymous Coward on Friday April 28, 2006 @04:37PM (#15223621)
    "One wonders how Sony will defend against these charges"

    With a well placed root-kit!
  • Maybe... (Score:5, Funny)

    by Anonymous Coward on Friday April 28, 2006 @04:40PM (#15223652)
    They're trying to cover for the cost of DRM packaging, and the possible breakage of the product when a listener tries to play it, forcing them to ship a fixed version? ;-)
  • by fighthairloss ( 455826 ) on Friday April 28, 2006 @04:41PM (#15223660)
    ...neither Sony nor any other major music label is going to get much sympathy from anyone on this.

    Regardless of the merits of the case, I think Sony is not going to get much more than a shrug from the well-informed of the world.

    Is this an example of karma? A cosmic balance? Maybe it's too early to say that until more lawsuits are initiated against the other side. Yes, that's right... more lawsuits against RIAA-affiliated companies, regardless of their merits. Sound familiar?
  • Defense? (Score:3, Funny)

    by wile_e8 ( 958263 ) on Friday April 28, 2006 @04:41PM (#15223667)
    Seeing as how there is no physical packaging, nor physical inventory that might suffer breakage, one wonders how Sony will defend against these charges.

    Blame it on piracy?

  • by Anonymous Coward
    > Because Sony counts such sales as the equivalent of a physical phonorecording sale, they deduct costs for packaging (20%) and breakage (15%) from the artists' royalties, just as they would if they were selling CDs through more traditional means. Seeing as how there is no physical packaging, nor physical inventory that might suffer breakage, one wonders how Sony will defend against these charges."

    "We have altered the bargain. Pray we do not alter it any further."

    Probably by counting online music s

    • To a RIAA weasel, online music in any form is indistinguishable from shoplifting

      Then how do they justify the $0.99 price tag for iTunes? If they're going to do the "all downloads are teh stealing!" route, why are they collecting at all?

  • Chewbaca (Score:5, Funny)

    by chrae ( 159904 ) on Friday April 28, 2006 @04:43PM (#15223683) Homepage

    one wonders how Sony will defend against these charges.

    The Chewbacca(tm) defense?

    • They are most likely explicitly allowed expenses in the contract with these artists. It doesn't matter that the money is not needed to secure these liabilities, they contractually obligated themselves to give this portion of monetary proceeds from their sales to the record company for whatever expenses the record company incurs. I'm no fan of swindling, but I'm not a fan of people suing because they signed shitty contracts either.
      • Re:Chewbaca (Score:5, Informative)

        by msaulters ( 130992 ) on Friday April 28, 2006 @05:59PM (#15224256) Homepage

        Whoa whoa whoa... The Allman Brothers, Cheap Trick... You think MP3 *existed* when they signed their contracts? Depending on the wording of the contracts, there's an argument to be made that Sony doesn't have a right to ANY cut of/control of the music as published on ITMS. Even if online distribution is somehow considered to be covered, the contracts are probably pretty explicit that the fees collected from the artist are for packaging, etc, and if there IS no packaging, then the validity of the contract, in this specific area is certainly debatable. (IANAL) If you collect 35% from me for packaging and breakage, then by god, you better show me some receipts for packaging and breakage, or else I want my 35% back.

        Just don't dismiss this as whining about shitty contracts. ESPECIALLY don't dismiss it out of hand when the #1 argument put forth by the xxAA's lately has been 'protecting the interests of the artists'. This is PERFECT proof that they don't give a flying fsck about the artists.
  • Shocked! (Score:3, Funny)

    by TedTschopp ( 244839 ) on Friday April 28, 2006 @04:44PM (#15223691) Homepage
    Shocked, Shocked I tell you Shocked, a large corporation not knowing how to properly do it's accounting.
  • Huh (Score:5, Interesting)

    by Mad Quacker ( 3327 ) on Friday April 28, 2006 @04:45PM (#15223704) Homepage
    The "breakage" charge has been bogus for quite some time. It really applied in the days of actual records, a lot of which wouldn't survive shipment. How many CD's (or tapes for that matter) end up broken per shipment? Definitely not 15%. So far they have been able to make this stick regardless. Now it's just completely ridiculous, versus just mostly.
    • Re:Huh (Score:2, Flamebait)

      by hackstraw ( 262471 ) *
      The "breakage" charge has been bogus for quite some time. It really applied in the days of actual records, a lot of which wouldn't survive shipment. How many CD's (or tapes for that matter) end up broken per shipment? Definitely not 15%. So far they have been able to make this stick regardless. Now it's just completely ridiculous, versus just mostly.

      I love all of those "extra" charges and surcharges and other BS tactics that companies are doing more and more of. I had one of those PODS storage units, and w
    • Re:Huh (Score:4, Informative)

      by Sycraft-fu ( 314770 ) on Friday April 28, 2006 @05:41PM (#15224137)
      Thing is CDs still do break. Or, rather, they get charged back for that. If something happens to make a CD unsellable, be it a consumer complaining it's broken, packaging damage, whatever, Best Buy doesn't eat the cost, they charge back the supplier. SOP for retail. There's usually negoations between the supplier and distributor about each months chargebacks and they agree on a final figure. A friend of mine does just this, on the supplier end.

      Ok so CDs still break, they still get chargebacks, so there's still justification for the charge, even if it's much less than the percentage.

      However on digital downloads, it's going to be real hard to back up. Apple doesn't charge back, since there is no sales going from Sony. Once Apple has secured the rights for distribution, they take on everything. They just cut Sony a check. Thus Sony is going to be very hard pressed to justify the fee.

      A contractual fee can be higher than reasonable, and still be legal. However if it covers something that doesn't exist at all, good chance it'll be rule unenforcable.
  • Breakage (Score:5, Informative)

    by swillden ( 191260 ) <shawn-ds@willden.org> on Friday April 28, 2006 @04:45PM (#15223707) Homepage Journal

    Seeing as how there is no physical packaging, nor physical inventory that might suffer breakage, one wonders how Sony will defend against these charges.

    How? The same way they do it with CDs. You don't really think 15% of CDs break in shipment, do you?

    The history of the breakage clause that exists in pretty much every modern royalties contract is a sad one. See, it originated back when music was distributed on records made of shellac, before the advent of vinyl. Shellac records were very brittle and very fragile, and when you packed a bunch of them in a box and shipped them to a store, it was pretty much guaranteed that some of them would arrive broken. At first the store owners and distributors tried to actually count how many were broken and adjust the invoices appropriately, but that was just too hard, and allowed merchants to take advantage by claiming a higher level of breakage than actually occurred. So they compromised and set an arbitrary percentage reduction of every invoice to cover broken records. The number chosen was about right, and it worked for everyone.

    Obviously, since the record company wasn't being paid by the stores for that percentage of theoretically-broken records, the same amount was likewise deducted from the net proceeds before calculating artist royalties.

    When vinyl came onto the scene, broken records became a rarity, rather than the norm, but the royalty deduction stayed.

    When eight track tapes and cassettes came into being, and then CDs packed in protective jewel boxes, actual breakage became nonexistent except in cases of egregious abuse by the shippers, which the shippers were actually to cover. So the net effect of breakage on distributors is and has been zero for a long time. But the royalty deduction stayed.

    So how is it any different that the copies are bits now? It's not like the CD breakage was any more real. Sony's response to that part of the complaint, at least, will be "It's a standard contract term, and they agreed to it."

    • Re:Breakage (Score:4, Insightful)

      by Vellmont ( 569020 ) on Friday April 28, 2006 @04:56PM (#15223799) Homepage

      So how is it any different that the copies are bits now? It's not like the CD breakage was any more real. Sony's response to that part of the complaint, at least, will be "It's a standard contract term, and they agreed to it."


      Contracts aren't that simple. Just because you agreed to the terms in a contract doesn't make those terms enforceable.
    • Re:Breakage (Score:3, Interesting)

      by geobeck ( 924637 )
      So how is it any different that the copies are bits now?

      My guess is that they will remove the 15% breakage deduction and replace it with a 25% piracy reduction. Or a 30% "Indy artists are stealing our profits" deduction.

    • OT: Philip Glass (Score:3, Interesting)

      by PCM2 ( 4486 )

      At first the store owners and distributors tried to actually count how many were broken and adjust the invoices appropriately, but that was just too hard, and allowed merchants to take advantage by claiming a higher level of breakage than actually occurred.

      Amusingly enough, the modern classical composer Philip Glass's first job was working at a relative's record store, where among his duties he had to take poor-selling records down to the basement and smash them, so the store wouldn't have to pay. (Heard

  • Yep, here's what Sony should be charging:

    20% - rootkit licensing and bundling
    10% - spoilage from Sharpie pirates
    15% - DMA key registration of Sony electronics division so their products can play said music
    12% - legal fees for eventually suing customers who download music
    5% - payoff fees to Wesbter and Oxford to redefine English words

    (Oh wait, but Sony didn't license the rootkit code, they PIRATED IT!)
  • I highly suspect that Sony was following the contracts with these artist to the letter, so the artists are attempting to say that their contracts (clearly written before the advent of mp3's and itunes) are no longer valid in light of new technology.
    The artists will most likely not win here and Sony will continue to make money.

    Is a bummer to have an old contract though..
    poor elvis

  • by Surt ( 22457 ) on Friday April 28, 2006 @04:46PM (#15223716) Homepage Journal
    My guess: they'll use lawyers.

    My second guess is clowns, but we'll see which way it goes.
  • I would be angry too at cd breakage clause.

    This is definitely a worthwhile lawsuit.

    Watch now as the record companies try to get Itune prices increased because of this. Reason for the increase ? Rockers asking for more jack.
  • 15% for breakage? WTF?

    If 15% of potential revenue is lost from physical media not making the trip from factory to customer in useable form, regular musicians need to put together a class action suit addressing Sony's gross incompetence.

    Sony...home of One Sigma Quality.
  • Sony's explanation (Score:5, Insightful)

    by kebes ( 861706 ) on Friday April 28, 2006 @04:48PM (#15223733) Journal
    Seeing as how there is no physical packaging, nor physical inventory that might suffer breakage, one wonders how Sony will defend against these charges.

    It's pretty simple. Sony will simply claim that there are marketing costs, server costs, bandwidth costs, and so on that amount to the same thing. To say otherwise would be to admit that they could be selling the downloads at lower cost to the consumer than the equivalent CD.

    Sony may even capitulate so far as to actually update the contracts, so that it spells out, for online sales, how much money goes to marketing, bandwidth, etc. At the end of the day, however, I highly doubt that the artist will see a larger percentage of the sales than they did before. Nor will the consumer see any kind of savings.

    It's unfortunate, too, because a reasonable pricing model for online downloads of music could have been arranged where:
    1. The consumer pays less per track than for the equivalent physical media (which is fair, considering compression losses and lack of a physical object).
    2. The artist gets slightly more per sale than before.
    3. The label gets slightly more per sale (because of savings due to lack of packaging, etc.).

    However (and not too surprisingly), the labels have decided that any savings that arise should all be kept by themselves. As we are starting to see, this strategy will lead to losses instead, as both artists and consumers seek out better strategies... maybe even business models without so many middle-men.
    • It's pretty simple. Sony will simply claim that there are marketing costs, server costs, bandwidth costs, and so on that amount to the same thing.

      Sony is certainly paying neither of the latter two costs, if any at all of the first. (concerts don't even count here). My guess is that Sony will pull out every ... trick (you thought I was gonna say cheap) they can to keep this from going to a jury trial, because they're likely to get strung up by the court of common sense.

      Thus, I predict Sony will settle, and
  • Not so fast (Score:5, Insightful)

    by Locke2005 ( 849178 ) on Friday April 28, 2006 @04:48PM (#15223734)
    ...one wonders how Sony will defend against these charges. The same way crew managers on the Alaska pipeline defended getting paid for 25-hour days: it's in the contract! Sony should know, they wrote the contract. Until artists wise up and stop signing contracts that allow the record companies to screw them any time they please, artists are going to keep getting screwed. Granted, in this case the contract was written before any such thing as internet downloads existed, but since Sony owns the copyrights and not the bands, they are in a very poor position to renegotiate.
    • I'm in the middle of two book deals [one to be released in June/July and the other in Sept] and neither of them will make me rich.

      That doesn't matter.

      Some people just want to get their work out there. :-)

      Tom
      • Re:Not so fast (Score:5, Interesting)

        by bill_kress ( 99356 ) on Friday April 28, 2006 @05:20PM (#15223986)
        Some people just want to get their work out there. :-)

        And to tell you the truth, these are the only people who's art I'm interested in. That's been my real problem with this crap all along.

        If you actually can say "I refuse to create art unless I am paid X dollars", I don't want your "Art"

        If you say "I want to create the art regardless of pay rate, or being paid at all", then chances are your art is going to end up being amazingly valuable. More often than not I don't mind paying for this at all.

        Free Market isn't all that it's made out to be, there are other factors at play. Seriously--and Free Market logic is totally useless when it comes to something that can be replicated for free.

        Seriously, what is the justification for keeping huge sections of humanity away from a certian type of art just because that artist hasn't been paid. Art is something to desciminate, to put in lives. It's a privilage to be able to create art for others--getting paid for it's a nice bonus, but it really shouldn't be considered a right.

        Actually France has a pretty good plan here. The state pays artists to create. This has been done in one way or another since, well, since the beginning of art.

        Might not be bad to have a similar system for Open Source programmers--Just enough money to keep them off the streets and happily coding away. (I know it's not quite THAT easy, but it's not THAT difficult either)
        • All good points.

          I'd like to point out that many publishers don't pay sustaining wages. But that's ok. The publisher I'm using uses authors who work in the field. So they get paid largely what amounts to a token sum. If I didn't have a day job my two book deals wouldn't pay enough to live off of.

          Of course I'm authoring books that will sell in thousands per quarter instead of say the 100s of thousands (e.g. like those retarded "best sellers" you see on TV). So the publishers take isn't that great given t
    • Re:Not so fast (Score:2, Insightful)

      by wpegden ( 931091 )
      Blaming artists for their contract terms is like blaming a fast food restaurant worker for the low minimum wage. In the artist-label economic relationship, the labels have all the power. Every artist needs a label, no label needs any particular artist. A rich and famous artist is a horse of a different color, of course, but by that point, you probably owe a label a bunch of money (for all they "invested" in you). The solution to the problem you're talking about would be some sort of collective bargainin

    • Until artists wise up and stop signing contracts that allow the record companies to screw them any time they please, artists are going to keep getting screwed.

      Somehow, I don't think you thought your cunning plan all the way through.

      Where do they go to sign a record contract, then?

      Now, granted, I'm a fan of independant labels and diy stuff. I think that the internet and the decreasing cost of superior technology has obsoleted the record label. But the public has yet to catch up.
    • Re:Not so fast (Score:3, Insightful)

      by jandrese ( 485 )
      This is what happens when the one side has pretty much all of the power in a contract negotiation. The other side gets screwed. Record companies pick and choose a small handful of bands from hundreds and hundreds of entries each year. The reason every band is screwed is that if a band tries to negotiate better terms, the recording company just walks away from the deal and finds a less financially savvy band. Granted, big names that renegotiate their contracts really have no excuse, except that they were
    • Shoot, forgot my bottom line:

      With only a few exceptions, you have two choices as a young (but talented) band:
      1. Mega Stardom offered by the label, but eventual financial ruin as the label keeps pretty much all of your money. The financial problems won't hit you for a couple of years though, and can be mititaged for a long time if you make it big.
      2. Some popularity as an "indy" or "cult" hit by rolling your own or signing up with an independant label. Few people will know your name, but you'll stand a
      • I think I have a 3rd solution, but it would take a rather savvy band to pull off. And I'm not sure of the details of how they sign contracts, so it might not work in some situations.

        Ask for a soft-copy of the contract. (Make up some BS story about wanting to send it to your lawyer ahead of time, and they're a "paperless office" or something.) Then modify the contract, and sign it before you give it back to the record company. As long as the contract visually looks the same, it's probably unlikely that the r
        • Nice try. One of the top rules in contract negotiations is to keep control of drafting the contract.

          You don't just give the other side a copy like that. You ask why they want it. If they want to add terms, offer to put in the terms for them, if they provide you a list. If they do want a copy, then that's fine, but you request a copy back. And if they send you something back (as opposed to just wanting something to review), you redline the hell out of it so that no change goes unnoticed. It's not that the si
  • Given that "breakage" is a bullshit accounting scam of the record companies to extort more money from people, I'm wondering why its taken "online" sales for artists to get pissy about it.

    For those who don't know, "breakage" derives from the old days where music came on records, which were prone to break during shipping. I assume that the rate of breakage was around 15% of those shipped.

    Of course for CDs its highly unlikely that any of them break in shipping, barring a container full falling off the ship, so
  • "We're doing it for the artist! It's the artist that suffers when you pirate music, and we protect the artist!"
  • My guess... (Score:4, Insightful)

    by DragonWriter ( 970822 ) on Friday April 28, 2006 @04:53PM (#15223763)
    Seeing as how there is no physical packaging, nor physical inventory that might suffer breakage, one wonders how Sony will defend against these charges.
    Since the charges appear to be fixed percentages and not based on any actual breakage or packaging costs, I'd guess (and this is only a guess) they are based on a schedule of charges included in some part or annex to the contract, which doesn't differentiate by media type, and the plaintiffs in the suit are going to have to try to defeat that by arguing that internet download was not envisioned by the original contract and either shouldn't have the deductions applied, or should require a new negotiation of terms.
  • by Anonymous Coward on Friday April 28, 2006 @05:01PM (#15223834)
    For record companies, every imaginable expense is billed to the artist. If you go on tour, ALL the expenses are billed to you including expenses like this one that are just ridiculous. The bottom line is that the record company tries to take zero risk. All the risk is moved over to the artists. You can have a hit record and end up owing the record company money.

    It is sort of the same for movies where actors are paid a percentage of the profits. The idea here is to make sure there are no profits so that the actors don't have to be paid.

    The fat cats make darn sure they get their share though. It's an expense after all.

    The silver lining is that, unless you are one of the really big name artists, you're much better off promoting your own career on-line. Once the majority of artists realize that, the record companies are toast.
  • Easy (Score:2, Interesting)

    by Xichekolas ( 908635 )

    "one wonders how Sony will defend against these charges"

    Easy... Sony will do what all major labels and the RIAA do... They will allot some people-crushing money to their lawyers, file countersuits, and keep the legal battle going on long enough that the artists run out of money and are forced to accept a settlement out-of-court for a paltry amount that probably doesn't even cover their legal fees.

    Meanwhile, Sony keeps collecting 94.5 cents of every 99 cent Cheap Trick song and puts it into a special ac

  • Zonk! I'm shocked! (Score:3, Insightful)

    by Ohreally_factor ( 593551 ) on Friday April 28, 2006 @05:04PM (#15223853) Journal
    You've edited my submission, and my submission was thereby improved! This is (almost) causing me to question all my notions about slashdot and the slashdot editors! Maybe you guys really do do some work around here? =)
  • Isn't this just a contract dispute?

    Slow news day?
  • It would shatter if dropped, so a breakage overhead was factored in. The packaging improved, breakage went down, fees stayed. CD's came about, breakage dropped again, fees remained. Now with digital, there's no breakage and still fees. Of course, with digital, the whole duplication, distribution, production and publicity thing is best done by cheap devices connected to interconnected routers, and the monolithic scammers are sure to fade away. Reminds me of having to keep my nothing insured for fire and
  • by constantnormal ( 512494 ) on Friday April 28, 2006 @05:13PM (#15223927)
    It would seem to me that inflating such "expenses" would reduce the reported profits considerably.

    I would expect the IRS to be going all medieval on them, but for the satanic protection of lobbyists.

    I would also hazard a guess that such exaggerated "expenses" are a standard practive in the music distribution business, not just a practice at Sony.
  • Hey, after they win this lawsuit and get the breakage and packaging deductions removed from online music sales, do you think they could then remove the touch-tone fee from my telephone bill? Thanks.
  • I'm working on a download system for karaoke music in winamp. I've asked myself this question when concerning karaoke, but the same thing applies to regular music.

    Our system downloads a XML catalog of karaoke songs through an RSS feed. Why don't artists sell downloads themselves?

    Webhosting with a little PHP IPN & RSS= $5@mo? Less even?
    Paypal fee's = $0.30 @ song
    Domain Name = $35 @ year

    I've tried contacting several artists about selling karaoke downloads of their music, but most of the managers i've ta
  • by Tired and Emotional ( 750842 ) on Friday April 28, 2006 @06:05PM (#15224298)
    Presumably the contracts already contained language for licensing agreements. So for example if Sony licensed a track for use in a car ad, or a film, the band would get 1/2 the net. This seems to be what the article is saying. Sony's point will be that a license licenses the use of the track (ie the "mechanicals"), and that the sale of a track to a customer for 99c does not include such a license, so its a sale of media not a license of rights. The bands will argue that the agreement with the vendor is a licensing of the rights since it gives the vendor the right to manufacture and distribute copies of the track (here, manufacture = transmit over an internet connection). Note that, according to the article, Sony is not distributing directly to the end user - there is a middle man. If Sony does the manufacturing itself (ie, you always get the tune from a Sony server) on the surface it seems they would prevail. If the vendor does so, it seems the bands should prevail. However there is also the doctrine of "unfair surprise" and internet distribution being so very different from the modes of distribution in place when these contracts were signed, having the contracts ruled inapplicable seems a possible outcome. That would probably be best for the bands - otherwise it might be possible for Sony to adopt a narrow technical solution that would limit how much the bands get. Clearly, given that Sony appears to be trousering around 60c after all costs, having the bands get a mere 4.5c seems quite unfair. [note - this is all speculative, since I have not seen the contracts, the article is not totally clear, and I am not a lawyer - nor do I play one on TV. I have however, as an occasional musician, done a certain amount of reading on contract law applying to the music industry]
  • by R2.0 ( 532027 ) on Friday April 28, 2006 @06:17PM (#15224370)
    specifically, assert that the major labels have NO right to distribute songs electronically. Prior to 2002, electronic distribution wasn't a blip on the radar screen. If the artists can argue that it is impossible to sign over distribution rights for a method that didn't exist when the contract is signed, then the rights devolve to the original copyright holder. that means the artists could cut deals with Apple directly and cut the RIAA members out completely.

    If they can get a legal team with big enough balls, and the right judge, it could happen.
    • by kimvette ( 919543 ) on Friday April 28, 2006 @06:45PM (#15224522) Homepage Journal
      You beat me to pointing that out. :(

      The other thing I'd nention is this:

      Because the contract covers defined methods of distribution, and online distribution is not allowed by the license from the copyright holders, this means that the labels themselves are guilty of copyright infringement, and are doing so willfully, for profit, and by levying fees against the artists and mailing checks which are baased on the fraudulent fees, they are adding mail fraud on top of the simple copyright infringement (of which there would be 1.000,000,000 individual counts if files). This is a felony actiity, and obviously piracy (if we accept the new term piracy).

      This is obviously not within fair use (simple trading of mix tapes for free, which is essentially what is done on P2P networks) but criminal activity, and as we all know, piracy funds terr'rists. Therefore, homeland security and the NSA should be closely scrutinizing the big labels (and their subsidiary "Indie (but not so Independent" labels) for terr'rist funding.
  • by merc ( 115854 ) <slashdot@upt.org> on Friday April 28, 2006 @07:12PM (#15224667) Homepage
    For those who never read the speech Courtney Love gave at the Digital Hollywood Online Entertainment Conference a few years ago it's worth a read. Most noteworthy was the position she held that the record labels are the real pirates.

    Sony, (once again) continues to make her position tenable.

    Courtney Love does the math:
    http://archive.salon.com/tech/feature/2000/06/14/l ove/ [salon.com]

Recent research has tended to show that the Abominable No-Man is being replaced by the Prohibitive Procrastinator. -- C.N. Parkinson

Working...