In the last few years, record labels have been taking uppercuts and jabs from musicians over the issue of digital income.
The latest swing came in Illinois federal court Friday from Frank Sullivan and James Peterik, founding members of the musical group Survivor. The band is best known for its ’80s single “Eye of the Tiger,” which rocketed up the charts after being featured in Rocky III.
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Sullivan and Peterik now allege that Sony Music has stiffed them on royalties. Specifically, the plaintiffs say their 1978 recording agreement means they should be taking an even 50/50 split with respect to licensed masters. But Sony is alleged to be treating downloads off of platforms like iTunes and Amazon as “sales of records” instead of licenses. Typically, the royalty share on sales is closer to 15 percent.
That’s not all.
The Survivor members also say they haven’t gotten any income derived from settlements with Napster, Grokster, Kazaa and others, and that Sony has improperly charged and deducted from royalties certain promotion and marketing costs.
The breach-of-contract complaint filed by Sullivan and Peterik is fairly typical except for an allegation involving their discussions with the defendant.
“Indeed, a Sony representative threatened that in the event Survivor persisted in its objection, Sony would exercise what it termed ‘the nuclear option’ — removal of the Survivor Masters from the songs licensed to iTunes for download by consumers, thereby wiping out that revenue stream altogether,” says the lawsuit. “By threatening ‘the nuclear option,’ Sony has conceded that its transaction with iTunes is a license subject to termination, and not a sale, of the Survivor Masters to iTunes. If it was a sale, Sony would have no right to demand return of the songs.”
Besides compensatory damages, the plaintiffs want an injunction that would prevent Sony Music from pulling music from digital outlets.
A representative for Sony Music didn’t immediately respond to a request for comment.
E-mail: Eriq.Gardner@THR.com
Twitter: @eriqgardner
