March 15, 2012

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Another major class action lawsuit has just been filed on the digital royalties front.

The Temptations, the pioneering male vocal group from the 1960s, is suing Universal Music in federal court in California, seeking millions of dollars after allegedly being cheated out of revenue from digital downloads and ringtones.

Otis Williams, one of the original members of The Temptations, and Ron Tyson, one of the later members, are the latest to join a growing chorus of musicians who are going to court with allegations that record labels have stiffed musicians by accounting for downloads off of iTunes as "sales" rather than "licenses."

There's more than a dozen of these types of lawsuits pending in courts, including eight that were filed in the past 12 months.

The latest challenge, similar to what's come already, seeks to punish UMG for attempting to get away with paying pennies on the dollar when artists believe they should be making dimes on the dollar. The cases are potentially worth hundreds of millions of dollars to the music industry. UMG is about to go to trial with F.B.T. Productions, producers for Eminem.

The new lawsuit from the Temptations, which covers other artists similarly situated, cites the F.B.T. case. According to the complaint:

"UMG's Standard Recording Agreements are, in every material way, the same as those at issue in F.B.T. Prods. Accordingly, Plaintiffs here allege that the digital download income received by UMG from Digital Content Providers are based on 'licenses' and not 'sales,' as those terms are defined in UMG's Standard Recording Agreements with these Providers. Just as in F.B.T. Prods., UMG has not properly accounted for the appropriate amount of royalties owed to Plaintiffs and Class members."

The complaint, filed Thursday and obtained by The Hollywood Reporter, goes so far as to list out all of UMG's recording artists, including superstars like James Brown, Eric Clapton, Guns 'N Roses, Kiss, Nirvana, The Police and The Who.

The lawsuit also provides stats like Apple's iTunes store generating $1.4 billion in revenue in the second quarter of 2011, up from $1.1 billion the previous year. The class action also goes after revenue from other digital download providers as well, including Amazon, Napster, Rhapsody, Zune, and eMusic as well as ringtone providers by wireless companies like AT&T, Verizon, Sprint, and T-Mobile.

Like some of the other lawsuits, this one also quotes the late Steve Jobs, who once published a piece titled "Thoughts on Music," which included the line, "[S]ince Apple does not own or control any music itself, it must license the rights to distribute music from others, primarily the 'big four' music companies: Universal, Sony BMG, Warner, and EMI."

UMG, though, is the largest of record labels, said to be responsible for 80 percent of downloads in the U.S.

As for The Temptations, the complaint asserts that their relationship with UMG is guided by a 1993 agreement that provides 14-16 percent of revenue from "sales" after packaging deductions compared to 50 percent from licensing income. That's a big difference.

The group, represented by a whopping 13 attorneys at five different law firms, is bringing causes of action that include breach of contract and unfair competition and seeking a declaratory judgment, an injunction, and damages to be proven at trial.

Universal has been contacted for comment, and if we hear any response, we'll update.

I have a feeling that we're gonna see alot of lawsuits like these.

Huh, David, Eddie, Paul and Melvin are all dead. If anyone sees any money from this I hope it is their families and not the current members of the Temptations that had nothing to do with those classic songs. Dennis deserves a big cut but what the heck did Otis actually do? He was very rarely audible on their recordings.

rialb said:

Huh, David, Eddie, Paul and Melvin are all dead. If anyone sees any money from this I hope it is their families and not the current members of the Temptations that had nothing to do with those classic songs. Dennis deserves a big cut but what the heck did Otis actually do? He was very rarely audible on their recordings.

The reason why Otis is relevant (to everyone's chagrain, trust me) is because he was one of the founding and original members of The Tempts from the very beginning, no matter if he could barely be heard on recordings or not. This guy has been suing left and right for years, I see that today is no different.

As far as the current members and/or members who were with the Tempts after the "classic" years who are included in the lawsuit is because of the songs that the public has access to on iTunes just aren't the songs from the "classic" era, it's most likely most of the songs from throughout the years up until the present.

[Edited 3/16/12 5:12am]

Well damn.

SoulAlive said:

I have a feeling that we're gonna see a lot of lawsuits like these.

I'm surprised litigious Prince has yet to jump on the proverbial bandwagon.