Sony Sued by Toto Over Unpaid Online Royalty Payments

2 Mar

According to reports by Billboard.biz and Rolling Stone, the band Toto has filed a lawsuit against Sony for not treating download sales as a license agreement.  In the band’s lawsuit, they argue download sales by a digital store, like iTunes, is a licensed arrangement and should be treated the same as other deals where music is licensed to third parties.  The band argues that digital downloads of their music should be paid as licenses and not as a simple sale as with CDs.  If the digital downloads are paid as licenses, Toto would receive 50% of net proceeds instead of the 12 to 20% of wholeslae for artist royalties for CD sales.  Toto is also alleging breach of contract by Sony for failure to pay the proper royalties.

Toto’s argument is based on precedent set by the royalty dispute last year involving Eminem and his recording label, Universal Music Group.  In that case, the court stated digital music sales should be treated as a license and artists are therefore entitled to 50% of receipts instead of the typical 12 to 20% royalty.

This is the latest lawsuit by an artist or group against their labels over online royalty payments.  Other artists suing their labels include Kenny Rogers and Peter Frampton.

To read the article from Billboard.biz, follow this link.  The article from Rolling Stone can be found at this link.  An article from The New York Times about Eminem’s lawsuit can be found at this link.

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