Business News Digital Royalties Timeline Labels & Publishers Legal

Allman Brothers Sony lawsuit gets green light

By | Published on Tuesday 24 March 2009

When the producers of some of Eminem’s early work, who get a royalty from those releases, were in court the other week arguing that Universal should pay them a bigger cut of Slim Shady’s digital revenues, we noted the similarities between their lawsuit and the case being pursued by the Allman Brothers against Sony Music. We reported that case was ongoing, and low and behold, there’s an update on it right now.

Both cases are based on how an artist’s digital revenues are classified. Labels currently treat download sales as being the same as physical track sales – ie CD sales – but some artists argue that download revenues should be treated like other licensing revenues that come in from radio and TV stations, and increasingly online streaming services, because the process (and cost) of distributing tracks to a download store has a lot more in common with making music available to media platforms than manufacturing and distributing CDs.

It’s an important distinction, because under many traditional record contracts artists get a much bigger share of money generated through licensing than they do of record sale revenues. If either sets of brothers – the Eminem-producing Bass Brothers or the Allman Brothers – were successful in their litigation then any artists whose recording contracts do not specifically discuss digital revenues could argue their record companies owe them a much bigger share of all past and future download sales. It could cost the record companies millions.

The Allman Brothers case was first filed in 2006. It was initially dismissed by the court because of the wording of the lawsuit, including issues surrounding the use of the terms “leasing” and “licensing”. But it was known that the Allman Brothers’ legal people were busy addressing that dismissal, and, according to Hypebot.com, last week they were successful because a US judge overruled the dismissal and gave the green light for the case to properly proceed to court.

Confirming the latest court ruling on their case, a spokesman for the Allman Brothers’ lawyers told reporters: “We are pleased with Judge Daniels decision to move forward and are looking forward to this case going before a jury on the merits of our claim”.

Of course, it’s worth remembering the Bass Brothers’ aforementioned claim regarding their share of Eminem digital royalties was unsuccessful. Asked how their case differed, the Allman Brothers’ legal people say that the Slim Shady case was affected by the wording of a 1998 agreement that specifically dealt with downloads – whereas no such provision is given in their client’s contracts with Sony.

They told Hypebot.com: “In [the Bass Brothers] case there was an amendment to the subject 1998 recording agreement that dealt with ‘the sale of albums by way of permanent download…’ which treated downloads as a general royalty generating activity like the sale of a CD. In our case, no such language exists and the subject record agreements simply state that the artist is entitled to 50% of the licensing income Sony received from the lease of the artist’s master recordings. The judge in the Eminem case opined that the agreement between iTunes and Universal Music was a license”.



READ MORE ABOUT: |

SIGN UP GO PREMIUM CMU NEWS CMU DAILY CMU DIGEST CMU TRENDS SETLIST