Sale Or License? Sister Sledge Sues Over ITunes 257
Hugh Pickens writes "The Hollywood Reporter reports that members of the iconic disco-era musical group Sister Sledge have filed a major class action lawsuit against Warner Music Group claiming that the music giant's method for calculating digital music purchases as 'sales' rather than 'licenses' has cheated them out of millions of dollars from digital music sales. Songwriters typically make much less money when an album is 'sold' than they do when their music is 'licensed' (the rationale derives from the costs that used to be associated with the physical production of records) but record labels have taken the position that music sold via such digital stores as iTunes should be counted as 'sales' rather than licenses. The difference in revenue can be significant as Sister Sledge claim their record deal promises 25 percent of revenue from licenses but only 5-1/2% to 6-1/2% of net from sales. Eminem's publisher brought a nearly identical claim against Universal Music Group and won an important decision at the 9th Circuit Court of Appeals in 2010 when the 9th Circuit ruled that iTunes' contract unambiguously provided that the music was licensed. The lawsuit argued that record companies' arrangements with digital retailers resembled a license more than it did a sale of a CD or record because, among other reasons, the labels furnished the seller with a single master recording that it then duplicated for customers. 'Unlike physical sales, where the record company manufactures each disc and has incremental costs, when they license to iTunes, all they do is turn over one master,' says attorney Richard S. Busch. 'It's only fair that the artist should receive 50 percent of the receipts.'"
Wait (Score:5, Insightful)
You mean the music labels aren't there for the protection of the artist!?
It also seems that 75% cut is still a lot for copying an mp3 file and drawing up some paperwork. Even if the label also provided the recording studio, etc, it seems like the artist is still getting the short end of the stick. Why is it that the artist always seems to be the last one to realize the label is screwing him even harder than its screwing the consumer?
And yet it was always a licence... (Score:5, Insightful)
Real Thieves of Hollywood... (Score:5, Insightful)
I think it is hilarious that the RIAA has convinced artists that it is the file sharers stealing millions from them all while the record labels play their accounting tricks for "recouping" costs.
I Like "Strike a Deal with the Devil" Better (Score:5, Insightful)
You're eventually carried off into eternal damnation in hell or eternal litigation in court -- I can't really say which is worse.
Re:Wait (Score:5, Insightful)
Don't think of RIAA as an isolated case. They're the middlemen; the brokers. The only "benefit" they have for the artists is its distribution channel and marketing/ promotions (but that''s been eroding for the past decade, thanks to the internet.)
RIAA becoming greedy? That's what these brokers/ facilitators do. It's a service industry that's quickly becoming obsolete.
Re:And so it begins... (Score:5, Insightful)
Oh? So now its sales? (Score:5, Insightful)
I thought we the music industry wanted to sue ReDigi into the ground because iTunes purchases were *not* sales but rather just licenses, and so the first sale doctrine didn't apply. So now its a license when that means they can restrict our right to resell our digital purchases when we no longer want them, but it's a sale when it comes to screwing artists out of money. I feel like maybe they're bit a teensy bit hypocritical.
Recording Industry Execs Suffering From Addiction (Score:3, Insightful)
It's sad really.
What's good for the goose is good for the gander (Score:5, Insightful)
Boy do these copyright holders like to use specific terms when it benefits them best. Oh, no, you're not buying this, you're just licensing it.
But, when talking to the authors/musicians, they refer to them as sales. Well, then. We'll see how this goes, damn double standards.
It's either a sale or a license. If it's a sale, then it is protected by the first sale doctrine and I can sell/give it away so long as I destroy the original copy. Otherwise, it is a license and the songwriters and musicians get a higher share. You can't have it both ways.
Re:Wait (Score:4, Insightful)
Supply and demand.
There are tons of groups that would like a shot of making it.
There are a limited number of slots available.
The cost to get one of those slots is being willing to bid a large percentage of your future rights.
Re:And so it begins... (Score:5, Insightful)
Both. It's a license or a sale depending on which benefits the RIAA more. Apparently, music files are like photons being waves or particles. They're both until observed (brought into a court of law) when they collapse into a single (RIAA-benefiting) state.
Right
Whether or not you own or license that copy of your your media when you get it online is something that the MAFIAA would like to remain vague. If it ever gets defined in court, one way or the other, big media is going to get sued all over the place. Currently they call it whatever works best for whatever court case they are involved in.
Owned, or licensed? You can't have it both ways. Not forever anyways.
Re:I Like "Strike a Deal with the Devil" Better (Score:5, Insightful)
I know this is slashdot (Score:5, Insightful)
but can we please leave the absolutely needless apple bashing out of completely unrelated article headlines?
They aren't suing over iTunes, they are suing over them being defrauded by their label. Apple nor iTunes has anything to do with the suit except as a delivery vector.
For fucks sake the actual reason for the suit (the label) doesn't even appear in the headline.
Re:Wait (Score:4, Insightful)
They're the middlemen; the brokers. The only "benefit" they have for the artists is its distribution channel and marketing/ promotions (but that''s been eroding for the past decade, thanks to the internet.)
They also provide the equivalent of venture capital to small artists with potential to go big. There is lots of room to debate the pros and cons of how those relationships are formed and how they mature (just as with venture capital). Regardless of those questions, however, it is another benefit that has to be acknowledged when forming a complete image of the problem space.
Re:How... interesting (Score:4, Insightful)
Trying to get a group of artists of any type to agree on *lunch* is hard enough. Getting them together to form an organization that would properly represent them would be near impossible. If you did get one started, it would last until the drummers decided to sue the lead singers. (Phil Collins and Don Henley's head would explode at this) There have been attempts, but no group has nearly the clout of the RIAA/MPAA
Re:Oh? So now its sales? (Score:5, Insightful)
Please RTFS again. Artists get a 25% percent cut when it's a license. The MAFIAA is telling them that music through iTunes is sold, which only gives artists a 6% cut.
It's actually even worse than that. The label is arguing that when they give iTunes a single master file and a license to reproduce that file for retail sale, it is a sale. But when iTunes sells individual MP3 copies to end users, it is a license.
The legal truth is almost certainly reversed. When the label gives a single master file and license to reproduce to iTunes, it is a license. When they sell an individual copy to a retail customer, it is a sale.
Re:And so it begins... (Score:5, Insightful)
Both. It's a license or a sale depending on which benefits the RIAA more. Apparently, music files are like photons being waves or particles. They're both until observed (brought into a court of law) when they collapse into a single (RIAA-benefiting) state.
That is funny, but bear in mind that the legal truth in this case almost certainly is that they are both -- but reversed from the RIAA's argument.
When a label gives a single master copy to iTunes and grants them a license to reproduce for retail sale, that is a license. That is important, because it means that the label is not incurring the cost of reproduction and distribution of many individual copies, and should not be retaining the pressing costs associated with vinyl records (the rational reason for copies paying the artist less).
When iTunes sells an individual copy to a retail customer, that is a sale -- but it has no bearing on the contract between the artist and the label. The artist's contract interest is in the transaction between the label and iTunes.
From a legal standpoint, it is almost certainly the case that the labels license iTunes to reproduce and distribute, and iTunes sells copies to retail customers. Trying to claim that something else is the case would require a judge with a very pliable sense of reality.
Re:And so it begins... (Score:5, Insightful)
But if the copyright to digital versions of the file is what is sold than Apple would be free to make copies.
Selling the right to make copies is CALLED LICENSING. IT IS WHAT LICENSING MEANS.
aaaaaaaaaarrrrrrrggggghghghghll
RIAA/MPAA Bullshit Double Standards (Score:4, Insightful)
One of the things that pisses me off the most about these fuckers is that their answer to the "Are you selling this to me or licensing this to me?" question always seems to be whichever one means they get paid again (or in this case, whichever one means they get to not pay someone else).
Your CD got scratched? Oooh, sorry, we sold you that music. Buy another copy.
You want to resell that legal MP3? Nope, that's a nontransferable license, no can do. (IIRC, this is currently being battled out in the courts.)
You think we owe you more in royalties? Nah, we sold those songs instead of licensing them. You mad, bro?
The sooner these dinosaurs get done in by their own greed, the better.
~Philly