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Temptations join digital royalty dispute party

By | Published on Friday 16 March 2012

The Temptations

Another day another digital royalties lawsuit in America. The Temptations are the latest artists to sue Universal Music for a bigger cut of the download pie.

As much previously reported, major labels treat downloads as record sales, whereas many veteran artists – whose record contracts don’t mention downloading – say that download arrangements with iTunes et al are licensing deals. It’s an important distinction because artists usually get a considerably bigger share of licensing income. Eminem collaborators FBT Productions successfully sued Universal over the issue, and now a coach load of aging pop stars are filing similar litigation, against Universal and other majors. Universal insists the ruling in the FBT case only applies to the producers’ specific contract, and does not set a precedent that can be applied to all pre-iTunes recording agreements. But the artists suing do not agree.

In The Temptations lawsuit, which involves both original and later members of the group, including Otis Williams and Ron Tyson, the plaintiffs argue: “UMG’s standard recording agreements are, in every material way, the same as those at issue in FBT Productions’. Accordingly, plaintiffs here allege that the digital download income received by UMG from digital content providers are based on ‘licenses’ and not ‘sales’, as those terms are defined in UMG’s standard recording agreements with these providers. Just as in FBT Productions’ [case], UMG has not properly accounted for the appropriate amount of royalties owed to plaintiffs”.

As previously reported, Sony Music, which was first hit with an action on this issue in 2006, as well as being at the receiving end of more recent litigation post the FBT ruling, has put together a settlement proposal that is now pending court approval. The settlement would offer affected artists an extra cash pay out now and a 3% increase on what they are currently receiving from download sales. Given artists routinely receive 25-35% more from licensing revenue than record sales under conventional record contracts, it remains to be seen if either the courts or artists accept that deal.

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