A DIGITAL DOWNLOAD IS A LICENSE, C’MON MAN!

By Daniel Davidson

It is starting to seem like the music moguls have disregarded the opinions of the court when it comes to paying royalties to the music artists.  I have reported on this on more than one occasion, beginning with the late Rick James.  The precedent handed down by a Federal Court decided the difference between a royalty payment for a CD sale and a digital download was that a digital download is a license and the artist is entitled to a 50% cut of the sale.  In the case of Rick James – whose legacy is carried on through his family – the musician belonged to an era that didn’t have the convenience of iTunes.  The ruling by a Federal Judge made the decision retroactive for older musicians.

In a new lawsuit filed by the estate of Bruce Gary, the lead singer of the group the Knack, famous for songs like My Sharona and Good Girls Don’t, claims that the label, Capitol Records, has disregarded the decisions by the courts that a digital download is a license.  Instead they were paying lesser royalties to the Knack members.  Included in digital downloads are mastertones and ringtones. 

Bruce Gary, who passed in 2006, is carried on by his sister whom is the executor of his estate.

It is no secret that the music labels’ pockets have been hit hard with the introduction of digital downloads.  Mostly due to the introduction of P2P software such as Napster and Kazaa.  Now, with these decisions calling digital downloads licenses instead of sales, the music labels will need to ante up and give the artists what is legally theirs.  I would predict that once the industry begins paying the actual royalties necessary, a hike in digital download prices will follow.  Cheers.