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Sale Or License? Sister Sledge Sues Over ITunes
Hugh Pickens writes "The Hollywood Reporter reports that members of the iconic disco-era musical group Sister Sledge have filed a major class action lawsuit against Warner Music Group claiming that the music giant's method for calculating digital music purchases as 'sales' rather than 'licenses' has cheated them out of millions of dollars from digital music sales. Songwriters typically make much less money when an album is 'sold' than they do when their music is 'licensed' (the rationale derives from the costs that used to be associated with the physical production of records) but record labels have taken the position that music sold via such digital stores as iTunes should be counted as 'sales' rather than licenses. The difference in revenue can be significant as Sister Sledge claim their record deal promises 25 percent of revenue from licenses but only 5-1/2% to 6-1/2% of net from sales. Eminem's publisher brought a nearly identical claim against Universal Music Group and won an important decision at the 9th Circuit Court of Appeals in 2010 when the 9th Circuit ruled that iTunes' contract unambiguously provided that the music was licensed. The lawsuit argued that record companies' arrangements with digital retailers resembled a license more than it did a sale of a CD or record because, among other reasons, the labels furnished the seller with a single master recording that it then duplicated for customers. 'Unlike physical sales, where the record company manufactures each disc and has incremental costs, when they license to iTunes, all they do is turn over one master,' says attorney Richard S. Busch. 'It's only fair that the artist should receive 50 percent of the receipts.'"
I think the term that describes it is "Hoist with his own petard".
You mean the music labels aren't there for the protection of the artist!?
It also seems that 75% cut is still a lot for copying an mp3 file and drawing up some paperwork. Even if the label also provided the recording studio, etc, it seems like the artist is still getting the short end of the stick. Why is it that the artist always seems to be the last one to realize the label is screwing him even harder than its screwing the consumer?
... when labels argued that there was no right of resale for customers.
So, RIAA on one hand pays its artists as if it sells its digital files like CDs, but files legal papers claiming that these files are licensed, not sold (so that the doctrine of first sale will not enable reselling the music).
How typical.
I think it is hilarious that the RIAA has convinced artists that it is the file sharers stealing millions from them all while the record labels play their accounting tricks for "recouping" costs.
Somewhere betwixt Faust and Robert Johnson's legend lies the RIAA where they find aspiring musicians they can capitalize on and offer them (seemingly) unlimited resources as they are first starting out and thirstiest for it most.
You're eventually carried off into eternal damnation in hell or eternal litigation in court -- I can't really say which is worse.
My work here is dung.
If it were Metallica or U2 this legal brawl would be interesting to follow, as both bands have a pile of cash and an army of lawyers ready to take on one of the big record labels, maybe even set a precedent.
Whatever money these sisters have left over from their drug abuse won't even tickle Warner.
I wonder what they will choose to argue in court. License to prevent reselling of music, or Sale to provide lower cuts to the artist?
Science advances one funeral at a time- Max Planck
I thought we the music industry wanted to sue ReDigi into the ground because iTunes purchases were *not* sales but rather just licenses, and so the first sale doctrine didn't apply. So now its a license when that means they can restrict our right to resell our digital purchases when we no longer want them, but it's a sale when it comes to screwing artists out of money. I feel like maybe they're bit a teensy bit hypocritical.
I sort of feel sorry for the people running these organizations. They have an addiction. To cake. They love cake. They can't get enough of it. But in a way this addiction compels them into a sort of schizophrenia. You see, they want to eat the cake. But they want to still have the cake.
It's sad really.
Both. It's a license or a sale depending on which benefits the RIAA more. Apparently, music files are like photons being waves or particles. They're both until observed (brought into a court of law) when they collapse into a single (RIAA-benefiting) state.
My sci-fi novel, Ghost Thief, is now available from Amazon.com.
I know we all love to hate the RIAA, but the one who's being sued is the label directly. As much as I'd like to blame the RIAA directly, the one who should be recieving my hate is Warner... after all, they're also scumbags
Democracy: Crowdsourcing a country near you
Boy do these copyright holders like to use specific terms when it benefits them best. Oh, no, you're not buying this, you're just licensing it.
But, when talking to the authors/musicians, they refer to them as sales. Well, then. We'll see how this goes, damn double standards.
It's either a sale or a license. If it's a sale, then it is protected by the first sale doctrine and I can sell/give it away so long as I destroy the original copy. Otherwise, it is a license and the songwriters and musicians get a higher share. You can't have it both ways.
I can't see courts finding that a sale via. iTunes is for the purpose of duplication rather than for the purpose of listening. 2 years ago the store hit the 10billion mark for songs sold. Has there ever even been a single one whose intent was redistribution?
I can understand that artists don't like the small fraction of revenue they get from digital music sales. It is very frustrating for a still successful artists, that the label makes lots of money long after there are no promotional costs. But this lawsuit is nonsense.
This could go badly for the record companies on both fronts.
They are apparently licensing their content to iTunes - providing a master for duplication by a distributor - which could lead to them paying higher fees to the artists. At the same time, however, iTunes may be selling individual copies to their users, which may fall under first dale doctrine and allow resale of the "permanent digital downloads" - as is the case under consideration with reDigi.
Is it just my observation, or are there way too many stupid people in the world?
Both. It's a license or a sale depending on which benefits the RIAA more. Apparently, music files are like photons being waves or particles. They're both until observed (brought into a court of law) when they collapse into a single (RIAA-benefiting) state.
Right
Whether or not you own or license that copy of your your media when you get it online is something that the MAFIAA would like to remain vague. If it ever gets defined in court, one way or the other, big media is going to get sued all over the place. Currently they call it whatever works best for whatever court case they are involved in.
Owned, or licensed? You can't have it both ways. Not forever anyways.
...or license it to you?
That would be one question. I thought it was a sale as it came up in the ReDigi case recently
Donte Alistair Anderson Roberts - hi son!
Karma: Chameleon
Wouldn't winning this particular case end in the increase of online music sales prices? I mean... if the distributors of digital music are forced to pay more money in order to "license" these songs/albums, won't they just pass those price increases on to the consumer?
Admittedly, I only read the summary as I am lazy before coffee time.
You can't have it both ways.
Maybe you can, so long as you pay the right people. I guess we'll find out soon enough!
Murphey's fighting Occam, and we're in the stands.
Oh, right, I forgot: this is the U.S., where your politicians can be bought and paid for.
Wasn't there another case recently where the record companies were arguing that they were licenses and so MP3s cannot be re-sold? I have little doubt they know clearly what they are doing. They are simply very willing to lie, cheat and misrepresent at each and every opportunity to benefit themselves and they do so without shame or remorse.
As soon as we can separate these people from the politicians (I'm looking at you Occupy) we might finally be able to call these jack-holes before congress and get the record straight, as it were, on their business model and philosophies on record without conflict or ambiguity. Okay, I'm dreaming... it's still early for me.
there's something amuzing here regarding mp3's and schroedingers cat and a Dropbox but i havent worked it out
I can't decide if it's admirable or depressing to see that you have faith in our congresscritters to not roll over for the RIAA and ensure that they can have it both ways.
Digital format counts as licensing, since there's no physical media to distribute. Therefore, there is no "first sale doctrine" when applied to digital formats. Don't like it? Stick to physical media.
It doesn't mean much now, it's built for the future.
Actually it is both I think.
The music is licensed to Apple for sale to Apple's customer(s) via iTunes.
IMO for the Sister Sledge's purposes the music is licensed since Apple is who pays Warner Music Group.
If it's only a license, and the RIAA companies OWN it, what about taxing that property?
but can we please leave the absolutely needless apple bashing out of completely unrelated article headlines?
They aren't suing over iTunes, they are suing over them being defrauded by their label. Apple nor iTunes has anything to do with the suit except as a delivery vector.
For fucks sake the actual reason for the suit (the label) doesn't even appear in the headline.
MPAA/RIAA got these rights extended to some 50 or 70 years. Pharmaceuticals (with a lot more R&D) last for only 12 years. Why should society allow the MPAA/RIAA such obscene long monopolies at the cost of the citizen? Solves a lot of so called piracy too.
CEO logic and real-world logic are mutually exclusive.
Religion: The greatest weapon of mass destruction of all time
The "licensing" of a song bought on iTunes and licensing a song for use in a commercial or video game are 2 very different processes, so it would depend on how licensing is defined in their contract. In practical terms, the label could argue pretty easily that they are different.
But, if "license" is defined vaguely or broadly enough in the contract itself this could be very bad for the labels, given they usually hand out generic contracts to almost all their artists, this could very easily snowball.
Get rid of the middleman. Now.
Religion: The greatest weapon of mass destruction of all time
Oh, right, I forgot: this is the U.S., where your politicians can be bought and paid for.
Which brings us to the following important question, are politicians bought or licensed?
I think it's more of a rental than either a purchase or a license...
"I'm not sure I like the fugnutish tone you used in your post!" -RogL (608926)-
Change cake to coke and perhaps your example is relevant to the music industry.
Seven puppies were harmed during the making of this post.
I don't have my DSM handy right now, but I think the addiction you are referring to is Greed, i.e. the excessive love of money, the root of all evil. (Greed might be a form of Obsessive Compulsive Disorder, but it might also be caused by other disorders. Hm, Financial Dismorphic Disorder, where no matter how much money you have, you think you need more)
Yes, greed has throughout the centuries compelled people to do unethical things. Nothing new here.
All ideas^H^H^H^H^Hprocesses in this post are Patent Pending. (as well as the process of patenting all postings)
Both. It's a license or a sale depending on which benefits the RIAA more. Apparently, music files are like photons being waves or particles. They're both until observed (brought into a court of law) when they collapse into a single (RIAA-benefiting) state.
That is funny, but bear in mind that the legal truth in this case almost certainly is that they are both -- but reversed from the RIAA's argument.
When a label gives a single master copy to iTunes and grants them a license to reproduce for retail sale, that is a license. That is important, because it means that the label is not incurring the cost of reproduction and distribution of many individual copies, and should not be retaining the pressing costs associated with vinyl records (the rational reason for copies paying the artist less).
When iTunes sells an individual copy to a retail customer, that is a sale -- but it has no bearing on the contract between the artist and the label. The artist's contract interest is in the transaction between the label and iTunes.
From a legal standpoint, it is almost certainly the case that the labels license iTunes to reproduce and distribute, and iTunes sells copies to retail customers. Trying to claim that something else is the case would require a judge with a very pliable sense of reality.
Stop-Prism.org: Opt Out of Surveillance
Well, they could have it both ways. It all depends on what the contract says. My guess is that they keep on using the same old contracts from before they had digital sales. They may not even technically allowed to do digital sales because it doesn't really fall into either category. A physical sale implies that they are creating discs/tapes and selling them. A digital sale obviously doesn't fall into that category. On the other hand, a license is usually something reserved for letting others perform your music, or use the music in a movie or something. Before digital sales, there wasn't really a concept of licensing a song to somebody for personal listening. If you wanted to just listen to something personally, you would buy the CD. If you wanted to perform the music, or broadcast it, or use it in a film or radio play, you would license it. But digital downloads are neither. They aren't physical sales, and they aren't really licenses either, because the record company gets a lot more than 99 cents for license, because they are meant for public peformance, which is why they pay the artist a bigger cut.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
No it is sold to Apple (so the low royality rate applies to the artist) so that Apple can license it to the customer (thus ensuring that the customer can't sell their copy).
"Hoist with his own petard" is a quote from Hamlet: "For 'tis sport to have the engineer/ Hoist with his own petard"
"Hoist" in this context means 'lifted into the air'
"Petard" is a small explosive device.
"Hoist with his own petard" = blown up by his own bomb.
It's supposed to be completely automatic, but actually you have to press this button.
They already own a license for it. They (presumably) sublicense it to customers?
For large sets, this will be our guide even unto death, for the LORD will work for each type of data it is applied to...
I wonder what they will choose to argue in court.
That they manipulated the language in the contract, knowing they were going to sell licenses to resellers to avoid paying artists the higher percentage on each sale, without informing the artist of their intentions. There is legal ambiguity for a party to specify in a contract that he/she/it will "pay a cost if an action is (not) taken" when they know in advance that they themselves are not only eligible to (not) take that action but are knowingly going to (not) take that action after the contract has been signed.
Having to work for a living is the root of all evil.
So should I feel justified for my illegal music downloads, as I'm really ripping off a large corporation rather than the artist so much? While I understand the artist is losing money, it just goes to further out the fact that the recording industry is still engaging in practices that worked when they had the market cornered.
Let's see more artists go indie.
Let the big record labels die.
I am Bennett Haselton! I am Bennett Haselton!
You aren't really lifted by an explosive as much as ripped apart.
In the everyday real world, yes. In the world of space travel, no. In the world of fiction, no.
Apart from its literal meaning, "RIAA" is also a metonym for Sony Music Entertainment, Universal Music Group, and Warner Music Group, the three big recording publishers in the RIAA.
With the Internet, there are effectively an unlimited number of slots
Not if your target audience lacks access to the Internet. For example, a lot of people aren't willing to pay roughly $30 more per month to replace their dumbphone with a smartphone just to listen to Internet radio instead of FM radio. (Dumbphone plans on Virgin Mobile USA start at $7/mo; smartphone plans on the same carrier start at $35/mo.)
on a single channel that can only show so much
The front page of a web site can only show so much. Not everybody's music video can be on the front page of, say, YouTube at once.
If an artist asks people down loading songs from their website to pay $1.00 and only 7% of the people pay, they make more than if they were in bed with a label.
Having to work for a living is the root of all evil.
Trying to get a group of artists of any type to agree on *lunch* is hard enough. Getting them together to form an organization that would properly represent them would be near impossible.
Then how was it not "near impossible" for, say, actors to form SAG and AFTRA?
I think you will find they were serious about disco.
I have excellent Karma and I am not afraid to Troll it.
I think it's more of a rental than either a purchase or a license...
But in that case they must be licensing it to iTunes together with terms that permit such a business model.
"Little does he know, but there is no 'I' in 'Idiot'!"
The market of "people who don't have Internet access" is becoming increasingly smaller all the time.
Smaller, but not small enough. Until smartphones become as common as car radios, there will still be people in situations where they can listen to FM radio but not Internet radio.
[Video sites offer] powerful and easy to use search capabilities that go far beyond just what is on the front page
So where would your prospective listeners get the keywords? Not everybody's music video can be in the top five results for those keywords.
and theoretically there can be an infinite number of YouTubes
Not everybody's YouTube can be on the front page of, say, "List of YouTubes" at once. Where should one start in a search for new music?
The point I'm trying laboriously to get to is that for the vast majority of the music listening public, you're not limited to listening to whatever happens to be on the radio.
Again, citation needed that "the vast majority of the music listening public" have access to a smartphone and cellular data plan for listening to whatever happens to be on their favorite Internet radio station.
Oh, right, I forgot: this is the U.S., where your politicians can be bought and paid for.
At least we have honest politicians here in the US. They *stay* bribed, at least for the most part.
No, no, you're not thinking; you're just being logical. --Niels Bohr
From a legal standpoint, it is almost certainly the case that the labels license iTunes to reproduce and distribute, and iTunes sells copies to retail customers. Trying to claim that something else is the case would require a judge with a very pliable sense of reality.
Sweet. I like the way you think, because I am short on cash and thought I would resell my iTunes purchased music that I don't listen to anymore to a friend of mine to raise some extra cash. First-sale doctrine being what it is, I bet I could get him to pay me a quarter a song to transfer ownership to him.
Wait... what?
If it was sold, Apple couldn't legally make copies. Ergo it has to be licensed to Apple. IANAL
He effected a bored affect.
Trying to claim that something else is the case would require a judge with a very pliable sense of reality.
This is iTunes. And Apple.
Ever heard of the Steve Jobs Reality Distortion Field?
That the man is dead doesn't matter. That's probably just a distorted reality in and by itself.
Sweet. I like the way you think, because I am short on cash and thought I would resell my iTunes purchased music that I don't listen to anymore to a friend of mine to raise some extra cash. First-sale doctrine being what it is, I bet I could get him to pay me a quarter a song to transfer ownership to him.
Wait... what?
Exactly so, go for it. And if your friends don't want them, there's even a market maker called "ReDigi." If they're relatively popular tracks, I think ReDigi pays more than $0.25 each.
Stop-Prism.org: Opt Out of Surveillance
Maybe we can get a judgment to decide the issue once and for all. It's merely icing on the cake to watch the RIAA take both positions simultaneously.
Ibid.
Its not forever, its only for 150 years + the life span of the artist which is another 50 years. 200 years is hardly enough time to even make a profit.
In jest of course.
Though I wonder how long it will take them to subvert the law further when they realize if they classify the corporation as the content creator/artist, which technically so long as it doesn't go insolvent is in fact immortal and thus granting copyright for infinity, or the sun burns out whichever comes first.
The ReDigi case that's going on right now has a great chance of deciding it once and for all. It's one case that's well worth paying attention to.
"You cannot simultaneously prevent and prepare for war." -- Albert Einstein
Both.
Schrödinger's Music ?
Artists could earn 75% to 97.5% more on their work if the media companies weren't in the middle sucking up all the profits. That much extra going directly to artists would enable the production of far more art than we have now! Many more entertainment groups would be financially viable if the media companies didn't exist. We really need to make copyrights non-transferable to stop this senseless waste of resources on an parasitic bureaucracy that adds no value.
They don't need to own a license, they own the song itself. Even the artist that created the song needs a license to play or listen to the it, called a reciprocal license in contracts. Woe be to the musician that doesn't get a reciprocal license - you'd need to pay money to play your own material...
But if the copyright to digital versions of the file is what is sold than Apple would be free to make copies.
Selling the right to make copies is CALLED LICENSING. IT IS WHAT LICENSING MEANS.
aaaaaaaaaarrrrrrrggggghghghghll
One of the things that pisses me off the most about these fuckers is that their answer to the "Are you selling this to me or licensing this to me?" question always seems to be whichever one means they get paid again (or in this case, whichever one means they get to not pay someone else).
Your CD got scratched? Oooh, sorry, we sold you that music. Buy another copy.
You want to resell that legal MP3? Nope, that's a nontransferable license, no can do. (IIRC, this is currently being battled out in the courts.)
You think we owe you more in royalties? Nah, we sold those songs instead of licensing them. You mad, bro?
The sooner these dinosaurs get done in by their own greed, the better.
~Philly
Sorry, not sure I follow how iTunes relates to political bribes... er, campaign contributions.
Unless.. is there an app for that?
"I'm not sure I like the fugnutish tone you used in your post!" -RogL (608926)-
A pliable sense of reality is a survival trait in the legal profession, unfortunately.
^^ wish this could be modded to +6 Score: Funny
Evolution: love it or leave it
Yeah they do seem to be trying to grab both slices of the pie.
Here's hoping the have as much success in that endeavor as SCO had vs. IBM on the one hand, and Novell on the other.
We are the 198 proof..
Not really... you can sell a license to do many things, copying only being one of them. Licensing just means that you are giving/selling permission to do something. What that something is would be specified in the terms of the license.
-- Let us endeavor so to live that when we pass even the undertaker shall be sorry. -- M. Twain
When iTunes sells an individual copy to a retail customer, that is a sale
I'm no big city lawyer, but I believe the Itunes terms and conditions specify that they are selling you a license to do a very limited set of things with the songs. Namely, to use it for your own personal listening enjoyment, and to do so on five authorized machines.
-- Let us endeavor so to live that when we pass even the undertaker shall be sorry. -- M. Twain
I have music from past video games - i.e. super mario, mega man, metroid, blaster master and tons of others. What if you get the music from the cartridge yourself(as in the case of the NES or Sega)? is this licensed or is it mine?
So if I buy it from Apple, do I buy it? or license it? or buy a copy of the license?
Am I allowed to resell it?
I guess you're spot on, on the trick. They seem to license for selling and so they can pick whatever it's appropriate for their benefit. Still, wouldn't that mean that whatever Apple does "selling" is not allowed because they licensed it? So what does the end user is buying?
I have some records that were made in the Soviet Union but have foreign music in them. The cover usually states "produced under license from $foreign_label" and has a logo of the foreign label in addition to "Melodiya", so, it means that a record label can allow some other record manufacturer to produce copies of the record (or just license the songs to be put in the new record). This would be a license. In this case, the "other record manufacturer" is Apple, but it makes digital copies instead of records. So, the artist should get the 25% of the money that Apple pays for the license to make copies (whether the agreement specifies a sum for each copy made or a one time payment should be irrelevant).
Really? I though that the numbers were 4.5% and 5.5%.
5-1/2% == 5-(1/2)% == 5-0.5% == 4.5%
While I agree to you that is how it SHOULD work, ReDigi is still trying to find out if it has legs to stand on.
http://thinkprogress.org/alyssa/2012/02/08/418729/redigi-itunes-and-the-legal-fight-over-first-sale-and-digital-content/?mobile=nc
The cake is a lie!
In this context "selling the right to make copies" and "licensing" are synonymous. When you sell the right to make copies you are licensing something, regardless of whether or not licensing something necessarily means selling the right to make copies.
This should be obvious and you should adjust your trolling behavior to either not try so hard or try harder.
Unfortunately we have many such judges here in the united states. However, I shall continue to whisper of this dream you speak of and hope that it comes true.
Oh, come on. At this point you're just torturing the poor guy.
Woe be to the musician that signs with a label...
The best example of "hoisted with their own petard"! Warner insisted itunes and the like clearly state that the downloaded file is not owned, but is licensed for the buyer's use. Very very specific about that. Now all the sudden it's actually sold, when they realize the artist (who they claim they are protecting with this mess) points out that they get significantly more for a license than a sale. They demanded it this way, let them pay for it.