DIGITAL MUSIC NEWS 2.9

Sister Sledge Sues Warner Music Over Digital Music Royalties Sister Sledge band members and actress-songwriter Ronee Blakley have joined forces to file a major class action lawsuit against Warner Music Group, alleging they have been cheated out of millions of dollars based on improper calculations of revenue from digital music sales. According to the Hollywood Reporter, Debra Sledge, Joan Sledge, Kathy Sledge Lightfoot, Kim Sledge Allen, and Ronee Blakely filed suit in federal court in San Francisco on Thursday [Feb. 2] claiming the music giant's method for calcluating digital music purchases as "sales" rather than "licenses" on songs such as the band's chart-topping "We Are Family" cheated them out of money due to them under recording contracts, many of them signed decades before music was sold digitally via iTunes, Amazon, ringtones, and other outlets.  "Rather than paying its recording artists and producers the percentage of net receipts it received - and continues to receive - from digital content providers for 'licenses,' Warner wrongfully treats each digital download as a 'sale' of a physical phonorecord...which are governed by much lower royalty provisions than 'licenses' in Warner's standard recording agreements." The lawsuit also claims WMG has improperly kept revenue from "reserves," which is money withheld to offset losses related to unsold records. The plaintiffs point out there's no such thing as unsold inventory in a digital universe. [Full story:Hollywood Reporter] Judge Denies Capitol Records' Request For ReDigi Injunction   Online digital music reseller ReDigi won a major victory this week when a district court judge denied a request from Capitol Records for a preliminary injunction in an attempt to shut the company down. Capitol's filing essentially challenged the legal principles of the cloud computing industry by claiming that uploading any files into a server requires that a copy be made, thus violating several terms of the Digital Millennium Copyright Act [DMCA]. Interestingly, an amendment to the DMCA states that "it is not an infringement for the owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program provided...that such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine." District Court Judge Richard Sullivan, who turned down Capitol Records' request, commented, "This is a fascinating issue...It raises a lot of technological and statutory issues." ReDigi Founder/CEO John Ossenmacher said of the decision, "We are grateful for the judge's decision in our favor. We hope today's ruling will help to expedite the trial so that we can get back to our business and providing consumers with access this incredible technology. And we hope Capitol can get back to their business and find a way to catch up to the times instead of trying to stop the innovation process." [Full story:mi2n] Paul McCartney To Streamers: "Take Down My Music"   Several sources are reporting that Universal Music Group and Concord Music have ordered all streaming services - including Rhapsody, MOG, and Radio - to remove all of Paul McCartney's material from their playlists. Spotify, which also received the notice, says it already complied with a previous order and removed McCartney's music in 2010, except for tracks that were licensed by companies other than UMG and Concord. The takedown notice covers McCartney's solo and Wings content, and apparently applies to all streaming services - suggesting he has ordered a clean sweep while placing emphasis on selling downloads. This action follows recent complaints from other artists, such as Coldplay, who say streaming sites don't pay well enough for the use of their music. Spotify, Rhapsody, MOG and others deny this charge, while also arguing that their services are relatively new and that their revenue and subscribers continue to grow. Payouts to artists will also continue to increase, they claim. Meanwhile, McCartney will be streaming his upcoming live concert on iTunes, while all of his music - and the entire Beatles catalog - is available there for download. [Full story: CBS News] Publisher: Record Labels Just Sit On Vevo Payments   When music video website Vevo recently announced it is generating upwards of $150 million annually, many music industry executives lauded the company for developing a sound business model that thus far also has returned more than $200 million to artists. Then Songs Music Publishing CEO Matt Pincus claimed in an article in The Wrap that Vevo is systematically skipping payments to indie publishers, with much of the shortfall coming through highly-inclusive deals involving Vevo's major-label joint venture partners. "What has gotten far less attention is the fact that independent publishers and the many songwriters we represent have not received any money from Vevo - ever," Pincus observed. "Vevo pays the major record labels, and the record labels take on the responsibility to pass through an accounting to the publishers, as they do with iTunes track sales. The problem is, the labels don't do that. They simply sit on the money. That's right. Vevo: $150 Million. Independent publishers and songwriters: Zero." Digital Music News [no connection with this publication] contacted Vevo immediately after The Wrap published the Pincus piece, but the website declined to comment. [Full story: Digital Music News] Online Piracy: Bad For Economy, Good For Creativity?   Online piracy is growing by leaps and bounds, and the use of peer-to-peer and cyberlocker sites - most of it for illegal sharing - amounts to over one-fourth of all Internet traffic. That statistic comes from Cisco Systems' Visual Networking Index, and supports Recording Industry Association of America [RIAA] data that suggests four out of five digital music downloads are illegal. As the New York Times reported this week, rampant piracy enabled by the Internet undermines the very economics of creative industries, although its effects on the economy as a whole are hard to measure. And while producers of content are deeply frustrated by the defeat of their efforts to curb online piracy in Congress last month - the bill they helped craft was flawed and could have stifled free expression on the Internet - their concern is "spot on." As the Times' Eduardo Porter, writes, "Studies used by the supporters of the defeated piracy legislation have tended to exaggerate piracy's economic costs and threat to jobs. For example, they often omit the fact that money not spent on music or movies is likely to be spent on something else." On the other hand, Porter continues, "Internet enthusiasts...point out that while piracy may be cutting the pay of record label executives, it doesn't seem to have stopped musicians from making new music. According to Nielsen, 75,300 albums were released in 2010, 25% more than in 2005. The wave of creation that is more hobby than profession has little to do with piracy, and would likely be unaffected by laws to curb illicit downloads." [Full story: New York Times] Al Bell Presents American Soul Music ... And American Soul TV If you're into classic and contemporary Soul, R&B, Blues, Gospel, Jazz, Hip-Hop Soul, Rap Soul, and Neo-Soul, we invite you to listen to Al Bell Presents American Soul Music. Former Stax Records owner and Motown Records Group President Al Bell personally has programmed this awesome radio station online, presenting your favorites from the 1960s and '70s [and some '80s], a lot of the best new music that's being released today, and some real gems you haven't heard in a long, long time. Come to www.AlBellPresents.Com  and hear it for yourself! And now...join us for Al Bell Presents American Soul TV here.