05 February 2012
VVN Music
It's becoming a near weekly occurrence, the filing of a new lawsuit against a record company for royalties from digital product.
The latest is Sister Sledge (Debra Sledge, Joan Sledge, Kathy Sledge Lightfoot and Kim Sledge Allen) who are bringing a class action lawsuit against Warner Music Group, saying that the company is paying royalties on their music at the "sales" rate instead of the "license" rate which is how most digital music is classified. For many artists, the difference is a royalty in the teens versus one of up to 50%. In the case of members of this lawsuit, Sister Sledge's contract grants them 25% royalties on licensed project but another member, actress Ronee Blakely who also recorded for Warner, would receive the full 50%.
A new twist on this dispute also came out in the Sister Sledge suit as the singers allege that Warner Brothers were keeping part of the royalties that they were paid as "reserves" which are meant to offset the costs of returned product from stores. As is pointed out in the suit, there is no physical product in the digital realm, so there are no possible costs related to any returns.
The other new aspect of this suit is that it is a class action, meaning that other artists could join the suit while it is making its way through the courts. This could be devastating for Warner as the suit could potentially include all the artist on their label plus others under their umbrella such as Atlantic and Rhino.
