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Allman Brothers and Cheap Trick Sue Sony BMG for Underpaying [05/30/2006]
Two bands, Allman Brothers Band and Cheap Trick, have sued Sony BMG for underpaying them for digital downloads of their music. The class action suit, filed in a New York District Court, alleges that Sony BMG does not share 50 per cent of the net licensing revenue generated by digital downloads with music artists.

According to the lawsuit, the bands are given only 4.5 cents per 99-cent download, instead of the 30 cents that they are entitled to. This is because each download is treated as a sale of a cassette or a CD even though it is not. So a charge of 20 per cent is deducted for containers and packaging of the product, and a further 50 per cent for 'audiofile'.

In addition, the amount to be paid is calculated only on 85 per cent of the sales keeping in mind the breakage of the product. These charges are inapplicable to digital downloads as no physical music product is involved.

“I feel strongly that the record company is doing the wrong thing. Sony Music is presently engaged in a widespread attempt to underpay its recording artists; with the technological advancements in the music industry, it is essential that artists receive the royalty income to which they are entitled,” said an attorney for the bands.

The two bands are old ones and the deals they signed were before digital music became popular. Allman Brothers signed the deal in 1989, while Cheap Trick did so in 1976 and for these deals Sony uses a pay scale that's on par with traditional record sales.

The lament is an old one, and artists claim that the deductions for packaging the music under the agreements are applicable only in case of cassettes and CDs. “This has been the elephant in the room for a while. If you don't dispute the accounting now, that establishes how it's going to be in the future,” said the manager of Cheap Trick band.

The lawsuit is looking at including about 2,500 bands that signed deals with Sony between 1962 and 2002.

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