As the labels continue to see their public business models implode, you gotta figure they’re going to spend even more time making sure that their private ones don’t.
The private ones, of course, involve screwing artists by not paying them royalties. I was just catching up on the latest suit involving such shenanigans.
Cher is suing Universal, saying it owes her and the heirs of Sonny Bono royalties from two compilation albums. There’s a fairly substantive Hollywood Reporter story on it here.
The article doesn’t make it 100 percent clear, but the issue seems to be the difference between royalties and licensing fees. Universal farmed out both Cher’s and Sonny & Cher’s music to another label for compilation purposes; in general terms, that would fall under the rubrick of licensing, fees from which might typically be split between label and artist fifty-fifty.
This is how the fees break down if an artist’s song is used in a movie, or is picked up for a Now That’s What I Call Music collection, on the grounds that it’s essentially free money.
A normal record sale, by contrast, would generate a normal royalty payment, which might typically be 20 percent of the wholesale price of the CD.
Cher’s suit says that Universal let a Warner repackaging arm put out the compilations, but tried to route the money back to make it look as if it had come in through normal Universal sales channels, and subject to the lesser percentage.
As the labels continue to sue file-sharersâ€”and generate press clippings that cite unchallenged the labels’ crazily high estimates of their alleged lossesâ€”it’s important to remember that the real criminals are the labels themselves. They routinely underpay royalties, and then make it punitively difficult to audit.