<b><i>Decision of Note:</b></i> Artists Bid for Half Of Digital Income Is Dismissed

The U.S. District Court for the Southern District of New York dismissed a breach-of-contract, class-action suit by recording artists seeking 50% of net income from the licensing of their recordings for digital uses like downloads and ringtones. Allman v. Sony BMG Music Entertainment, 06 CV 3252(GBD). For digital licensing, Sony has paid the artists, who include Cheap Trick and the Allman Brothers Band, lower royalty rates under a clause for sales of 'phonograph records' through 'normal retail channels.'

The district court noted: 'Plaintiffs acknowledge that digital music files, the form in which the subject recordings were distributed, fall within the definition of 'phonograph records.' Thus, the plain language of this royalty provision demonstrates its applicability to sales of sound recordings, by defendant's licensees through normal retail channels, including recordings that are distributed to consumers via transmission of digital music files.'

The U.S. District Court for the Southern District of New York dismissed a breach-of-contract, class-action suit by recording artists seeking 50% of net income from the licensing of their recordings for digital uses like downloads and ringtones. Allman v. Sony BMG Music Entertainment, 06 CV 3252(GBD). For digital licensing, Sony has paid the artists, who include Cheap Trick and the Allman Brothers Band, lower royalty rates under a clause for sales of 'phonograph records' through 'normal retail channels.'

The district court noted: 'Plaintiffs acknowledge that digital music files, the form in which the subject recordings were distributed, fall within the definition of 'phonograph records.' Thus, the plain language of this royalty provision demonstrates its applicability to sales of sound recordings, by defendant's licensees through normal retail channels, including recordings that are distributed to consumers via transmission of digital music files.'

The court added that the 'the emergence of a new era of digital sound recordings does not afford plaintiffs the right, under the guise of contract interpretation, to rewrite the terms of the contracts in order to secure a more favorable, or what they consider to be more equitable, royalty formula.'