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Sony Gets Sued Over Digital Royalties, Plans New Assault on iPod

Friday, April 28th, 2006 at 11:30 AM - by

Sony this week was hit with a class action lawsuit over digital music downloads that several artists say have been underpaid. A senior executive with the company also said on Thursday that it plans a renewed assault on the iPod with a new MP3 player, as well as a download service and software.

The class action lawsuit was initiated by the Allman Brothers Band and Cheap Trick, according to Macworld UK. The bands accuse Sony Music of not paying the full royalties due to them through the sale of their music at the iTunes Music Store and other online sites. They say that the company has skirted around its contract by treating digital downloads the same as physical CD sales, which means they're deducting a flat rate for broken product and packaging charges.

The bands are looking for millions of dollars in damages.

Meanwhile, Sony Music's parent company is readying a new MP3 player that will be sold worldwide sometime during its next fiscal year, which ends in March 2007. A Macworld UK story said that Sony senior vice-president Takao Yuhara told Tokyo reporters that the company will also debut a download service and software.

Sony said that it sold 4.5 million MP3 players during its recently-ended fiscal year and expects to ship 5.5 million during the current year. Apple sold more than 22 million iPods during the past two fiscal quarters alone, in comparison.

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mahuti said:

member since 09 Jan 2003 with 363 posts, TMO Staff, send him a message or view his profile

Fri Apr 28, 2006 11:42 am

This just in... based on the public frenzy over Sony's bean shaped MP3 player, Sony's LATEST iPod killer will now come in a variety of other vegetable shapes. The company said the vegatable motif was inspired by the comatose brains of their leadership.

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Tiger said:

member since 17 Jun 2003 with 904 posts, unranked, send him a message or view his profile

Fri Apr 28, 2006 11:50 am

New from Sony...

The revolutionary MP3 player.

It's name: The Lebotomy

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A guest said: (hide)

Fri Apr 28, 2006 11:51 am

The Sony "Digital Kohlrabi Music Player" is said to be awesome.

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A guest said: (hide)

Fri Apr 28, 2006 11:52 am

Tigger, You meant "lobotomy"

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switchtoamac said:

member since 13 Mar 2006 with 3 posts, unranked, send him a message or view his profile

Fri Apr 28, 2006 12:26 pm

Sony can go ahead and attempt to take on the iPod but Apple has already hit a homerun with the iPod and the iTunes Music Store. Apple is far ahead of the competition with their current iPods. Who knows what Apple has working in their labs but I can rest assured that it's better than anything others have to offer.

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Biff said:

member since 08 Apr 2004 with 1479 posts, unranked, send him a message or view his profile

Fri Apr 28, 2006 1:12 pm

They should totally sue Sony for deducting those charges from digital downloads. That's just rediculous. But millions of dollars in damages? Somehow I doubt that a couple of really old bands have even generated millions of dollars of revenue for a little-used music service. Then you have to figure the % deduction for packaging, etc is relatively small. And then the artist royalty % of that amount would be even smaller. Wouldn't it just be cheaper for Sony to cut these guys a check for the $1000 it probably works out to and be done with it?

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BradC said:

member since 29 Apr 2005 with 80 posts, TMO Staff, send him a message or view his profile

Fri Apr 28, 2006 1:25 pm

It's a class action lawsuit, Biff, so they want it to cover *all* Sony artists, new and old. My guess is that these older artists figure they have nothing to lose by initiating this. If Sony gets pissed, a new artist could have their livelihood hampered if the label decides to cancel their contract or something, but bands like Allman Bros. and Cheap Trick are over the hill. So, yeah, it's a small percentage, but applied across all those bands, as well as across *all* music services (including iTMS, as the article said), then it amounts to something.

Plus, I'd imagine in a civil case you can ask for even more damages because they're withholding money you were legally entitled to X number of months ago. Money you should have had in your pocket to pay bils or whatever. Look at it this way: if your employer didn't pay you for 6 months, wouldn't you want not only the money you were entitled to, but also additional damages because of the financial problems you incurred as a result?

And before anyone says that this is different because these guys are famous rock bands or whatever, I'd respond that that shouldn't matter. If you're getting screwed, you're getting screwed, and you have the right to recoup your losses, regardless of your personal wealth. And, no, I have no clue if the guys in Cheap Trick are behind on bills or whatever. I'd imagine, though, that they're seeing a lot less income than they did 20 or 30 years ago, so maybe this could be hurting them financially in some way.

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palenoue said:

member since 19 Mar 2004 with 23 posts, unranked, send him a message or view his profile

Fri Apr 28, 2006 3:45 pm

What BradC said does seem to be the case. As I've seen of this so far, Sony has been using this "damaged & packaging" scam, along with many others, to rip off artists ever since iTunes music store started (and they still claim they represent the musicians A couple of new, small groups noticed and took exception, only to have their albums advertising cut to nothing and their contracts up for "renegotiation" (i.e.: being ignored until the time runs out, so they can't sign up with another label) and, of course, they've been pulled from the iTunes store. But that is another court case that's making it's way through the system. Anyway, they sent letters to other groups, most of which did their own research and found they too were being ripped off, and formed a loose alliance to start a class action lawsuit so Sony couldn't crush them into submission one at a time as they did with the first complainers. The Allman Bros and Cheap Trick agreed to be the spearhead for the suit because, as BradC said, what have they got to lose? Sony will probably fight this till their dying breath, because once they are found liable for this patently obvious scam, they will probably be found liable for all of the other dirty little tricks they pull, which will launch a few more class action suits, and end up paying a hundred times more in legal fees, reimbursements and punitive damages than they made ripping off their artists.

But hey, Sony management has a reputation to uphold, of being the stupidest tech company in the world.

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Biff said:

member since 08 Apr 2004 with 1479 posts, unranked, send him a message or view his profile

Fri Apr 28, 2006 3:52 pm

I totally support the idea of the lawsuit. Scam is a great way to describe what Sony has been doing. Class action is better, but still it's Sony's music service. What have they sold, like 10 songs total?

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BradC said:

member since 29 Apr 2005 with 80 posts, TMO Staff, send him a message or view his profile

Fri Apr 28, 2006 4:18 pm

Quote
Class action is better, but still it's Sony's music service. What have they sold, like 10 songs total?

Once again, this applies to *all* online music services: iTMS, Sony Connect, Napster, Real, etc. The argument is that Sony is stiffing its artists on every digital sale, regardless of where it happens.

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A guest said: (hide)

Sat Apr 29, 2006 5:48 am

Surprise surprise. Sony's playing catch up again. They should try to innovate not emulate.

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A guest said: (hide)

Sat Apr 29, 2006 6:17 am

So does anyone know how Sony's products download service and software will be different to what they already do? Better still does Sony know.

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