An Allman Brothers 'revival' will test record labels
4:18 PM PDT 3/23/2009 by Eriq Gardner
Musicians are still angling to get a bigger chunk of record company revenues from sales on iTunes and other third-party digital distributors.
A few weeks ago, buzz centered on a case brought by producers on Eminem's earlier work against Universal Music Group. The lawsuit was thought to be the big test of this issue, but when a federal Los Angeles jury ruled that UMG didn't owe any extra money from the online sales, the topic went thud and an "upending of the music industry" never materialized.
Meanwhile, Brian Caplan of Caplan & Ross has been working hard to reinvigorate a class action lawsuit brought by the Allman Brothers Band against Sony BMG that alleges the record distributor should be paying half of net licensing and leasing income received from digital download stores.
The 2006 lawsuit was previously dismissed over a failure to state a claim, but District Judge George Daniels has decided to give the plaintiffs another chance.
Caplan says the suit brought by Eminem producers failed because of contract language that treated downloads as "general royalty generating activity," but that in the Allman Brothers suit, there is no such contractual stumbling block, he says. Caplan also sent us the original summary judgment decision in the Eminem suit, which is largely moot now, but seems to offer hope that digital downloads have the characteristics of a license.
That's important because the Allman Brothers lawsuit may offer a real test over whether online sales constitute either "distribution" or "licensing" arrangements. If the latter, they'd require higher royalty payments, and companies like Sony BMG could be on the hook for a heck of a lot of money to its artists.
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