Tuesday, May 02, 2006

Bands From '70s and digital music

Two of the biggest-selling rock bands of the 1970s have filed suit against their onetime label saying the royalties reaching them from digitally downloaded versions of their songs are too low.

The Allman Brothers Band and Cheap Trick filed suit against Sony BMG in U.S. District Court in New York, claiming that a higher percentage of royalties from digital music should go to the artists themselves.

Licensing vs. Sales

At issue is how much of the cost to download a song -- typically around 99 US cents for a single track from major sites such as iTunes -- should go to the artists.

The two bands claim that Sony is violating a contract agreement made with them and say digital music should be treated as licensing rather than sales, which would mean more royalties for artists -- they are seeking half the net licensing revenues from each song, or about 30 cents for each download.

Currently, the two bands see 4.5 cents, or less than 5 percent, of the download price for a song. That includes deductions, the suit contends, that Sony is making for "packaging costs."

Industry estimates peg the label's take at about 70 percent of the download price, with Apple (Nasdaq: AAPL) Latest News about Apple or other download-store managers getting a small cut along with the artists.

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