The group of artists who filed a class action lawsuit against Sony BMG, alleging the music giant has underpaid artist royalties for digital music transactions, has added ringtones to its list of grievances.
The plaintiffs, which include Cheap Trick and The Allman Brothers, this month amended the lawsuit—originally filed in April—to include ringtones to the list of downloadable music for which they feel Sony BMG is underpaying them.
At issue in the action, filed April 27 in U.S. District Court in New York by Labaton Sucharow & Rudoff and Probstein & Weiner, is whether the label’s deal with online services for downloads is a license or a sale. The artists assert they should receive their contractual rate due them on the licensing of their music, typically about 50%, not the rate due them for royalty of a sale, typically 10%-14%.
The difference is significant. On average, artists receive about 4.5 cents per 99-cent song download and about 8.5 cents per ringtone sale. Under the compensation scheme they prefer, artists would receive 30 cents per song download and 50-75 cents per ringtone.
