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Elvis estate suing on digital royalties

By | Published on Friday 11 December 2015

Elvis Presley

So it turns out that even Elvis is fighting the major label system over the payment of digital royalties.

A long-running royalties battle between the Elvis Presley estate and Sony Music in Germany spilled over into the New York courts earlier this week with Elvis Presley Enterprises seeking documentation as to how the major record company is exploiting the King’s sound recordings catalogue around the world.

There are various elements to the royalties dispute that has been rumbling its way through the German courts for four years now, during which time it was ruled that Elvis Presley Enterprises can only dispute monies paid back to 2008. But a key part of the case is the classic royalty dispute of recent years, how the major decides what cut to pay the Presley estate on digital rather than physical income.

This comes back to the old sales v licensing debate. As with most legacy contracts, Presley’s various agreements with his label in the US – now Sony Music subsidiaries – distinguished between sales and licensing income, paying a much bigger royalty on the latter than the former. But the labels have treated downloads and streams as sales, even though the record companies have ‘licensing deals’ with iTunes and Spotify et al.

According to The Hollywood Reporter, the Elvis Presley Enterprises lawsuit states: “It is standard practice with licensing revenues that authors and performing artists have a 50% share of the royalties earned. These [should] include revenues from digital exploitation because the defendants do not sell those files themselves rather they grant exploitation licences to third parties, for example iTunes, or Spotify”.

The litigation also includes another common gripe of artists, the fees major record companies charge as money moves around their subsidiaries, in this case Sony’s German business back to the US. Although standard practice, many artists and managers feel these fees are unfair in the digital domain, especially on catalogue content, where the extra resource provided and risk taken by the international subsidiary is minimal.