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Counting Crows sue for bigger digital cut

By | Published on Wednesday 15 January 2014

Counting Crows

Counting Crows are the latest arrivals at the digital royalties dispute house party, which has quite a guest list at the moment, including Kenny Rogers, Rob Zombie, Chuck D, Peter Frampton, James Taylor, Toto, The Temptations, a Doobie Brother and Sister Sledge. Though ‘Weird Al’ Yankovic recently snuck out through a patio window, and the Warner-signed party-goers are currently in the kitchen considering a class action settlement proposal.

As much previously reported, a stack of veteran artists in the US – all with pre-iTunes contracts – are claiming that the labels should treat download income as ‘licensing’ rather than ‘record sale’ revenue. It’s an important distinction, because a classic record contract will pay the artists a much bigger cut of the money on the former than the latter (licensing income traditionally being a much smaller revenue stream overall).

The key ruling in this dispute is FBT Productions v Universal Music, where the early Eminem collaborators secured a much bigger payout on download money relating to the Slim Shady tracks they have a stake in. It’s yet to be tested in court whether that ruling sets a wider precedent, though many music attorneys reckon it does, and both Sony Music and Warner Music have proposed settlement agreements, which suggests they think the heritage acts have at least something of an argument.

Though neither of those settlements – the Warner one was put forward last month – are particularly generous, offering to pay a few per cent more on downloads than physical CD sales, but nowhere near the figure that would be customarily paid on licensing income (the cut on record sales would be up to 15%, the licensing cut could be in the region of 40-50%). It’s not clear if any affected artists have accepted or indicated an intent to accept those proposed settlements.

But Counting Crows were signed to Universal Music’s Geffen, so don’t even have a settlement proposal to consider. In the band’s lawsuit, filed with the LA Superior Court, their legal reps say: “Through this lawsuit, Counting Crows seeks to compel defendant to account to and pay the rightful share of licensing income paid to defendant for downloads and ringtones of the recorded music licensed by defendant to these entities”.

As has occurred with some other digital royalty lawsuits, Counting Crows have thrown various other royalty-related gripes into the mix, claiming that an audit of the mega-major’s books turned up $1 million in alleged underpayments. Which would buy an awful lot of pizzas for this increasingly raucous litigation party.