Apple and music labels accused of shortchanging artists

[Kasper]

A fresh class action lawsuit charges Apple's iTunes, major online music shops, and top record labels with performing an end-run around a musician's permission and his royalty payments.

Dawg Music, a relatively small label run by bluegrass musician (and former collaborator with Jerry Garcia) David Grisman as well as his business partner Craig Miller, is accusing those that carry Grisman's catalog of knowingly selling his works with sometimes poor or nonexistent compensation, and without his consent.

Filed in its most recent form on May 3rd by the Law Offices of Jeffery L. Graubart and represented by Strange and Carpenter, the suit makes a two-part complaint that implicates both labels and their online store partners. Two of the largest record producers in the industry, Universal Music Group and Warner Music, are alleged to have neglected Dawg Music's copyrights and royalties when signing deals with major online services.

In effect, the two music giants are said to have agreed to online distribution of Grisman's library without first asking the permission of Dawg Music, which owns the copyrights. By doing so, Universal and Warner have not only made unauthorized hard copies of the music but have also usurped control of the royalties due for each album: the lack of communication has meant "gross underpayments" of the expected dues, Dawg Music says in the 26-page filing.

Online stores are guilty by association, according to the complaint. The suit claims that in addition to Apple's iTunes, seven other outlets -- AOL Music Now, Buy.com, Microsoft's MSN.com, Napster, RealNetworks' Rhapsody, Wal-Mart.com, and Yahoo Music -- are also culpable by agreeing to host and sell the unsanctioned copies from their servers. While all eight pay royalties on the music in question, the failures by Universal and Warner to land specific online contracts have resulted in the direct-download services trading songs without genuine consent; money is sent to the intermediate labels, not the copyright holders.

Sidestepping the copyrights this way has caused "irreparable injury" to Dawg Music, the suit alleges, and will continue to inflict damage as long as the present-day contracts for online music remain in place. Most of the blame lay at the labels' feet for both infringing on copyright and for leading the online services to commit accidental infringement; but all the targets of the lawsuit, including Apple, would have to compensate Dawg Music should it win its battle in the central California court hearing the case.

The reparations could be comparatively severe for a royalty case. Although the plaintiffs hope to use their time in court to prove the damages and missed profits they expect to receive, the alternative remedy would have each defendant pay $150,000 for every work whose copyright was violated -- resulting in millions of dollars spread across the involved defendants.

For a successful case, however, the attorneys will have to prove that none of the existing clauses in Dawg Music's agreements with Universal and Warner already cover the online distribution at the heart of the matter. When contacted by AppleInsider, however, representing attorney Brian Strange declined elaborating on the claims.

"We do not comment on pending litigation," said Strange. "[Only] the complaint is a matter of public record."

[bdj21ya]

I don't really see how they can sue Apple, given the fact that Apple was never in privy with them. Their beef is really with the labels.

[Magic_Al_]

This doesn't sound like a "class action".

[palex9]

Time they got a dose of their own medicine. Blood sucking syccophants! Did you know that they charge artists for every little thing they do on his behalf? parties, limo, album artwork, studio time, etc. These are not gifts by the labels, they deduct these expenses from the royalty payments. And which artist really knows or keeps tracks of, how much these things really cost?

[JeffDM]

I really don't see how any of the online stores can possibly be culpable except under very unlikely circumstances. I don't think that a dozen different high profile legit stores would knowingly distribute infringing wares.

[wilco]

Originally Posted by palex9

And which artist really knows or keeps tracks of, how much these things really cost?

A smart artist? Or an artist with a manager?

The Problem With Music

[Louzer]

Originally Posted by palex9

Time they got a dose of their own medicine. Blood sucking syccophants! Did you know that they charge artists for every little thing they do on his behalf? parties, limo, album artwork, studio time, etc. These are not gifts by the labels, they deduct these expenses from the royalty payments. And which artist really knows or keeps tracks of, how much these things really cost?

Wait, do you mean that the record labels, on behalf of their clients, hold parties, rent limos, reserve studio time, and actually expect the artists to pay for any of that???? You've got to be f'ing kidding me! Those money-grubbing bastards! You know what you should do, you should start your own label, and cover all these costs. That'll show those blood suckers!

[Louzer]

Originally Posted by JeffDM

I really don't see how any of the online stores can possibly be culpable except under very unlikely circumstances. I don't think that a dozen different high profile legit stores would knowingly distribute infringing wares.

They can be culpable if they knew there were issues (say they were informed by Dawg of the infringement yet did not remove the content). And there have been other lawsuits where, say, someone claims their LCD process patent was used, but they don't just sue samsung, they also go after the PC makers who used it.

But it is nice to see them suing the labels for $150,000 per sale. Should make them know what it feels like to be 18 and getting sued for sharing"The Macarena" via a P2P program. Makes me want to go out and buy up all their music on the iTMS, just to raise the bill even more!

[Louzer]

Originally Posted by Magic_Al_

This doesn't sound like a "class action".

It depends on whether these are the only ones affected by this problem, or that there are other copyright holders who've been end-arounded by the same tactics.

And did you see the quote from the guy's attorney? "We do not comment on pending litigation." Classic! It's like he's auditioning for a job as an Apple attorney!

[SpamSandwich]

Of course, we all know how popular bluegrass music is these days...

Sounds like his music isn't selling.

[lucas_a]

Did you know that they charge artists for every little thing they do on his behalf? parties, limo, album artwork, studio time, etc. These are not gifts by the labels, they deduct these expenses from the royalty payments.

The record labels do make themselves easy to hate, but until recently they have been a necessarily evil for musicians to make it. While you are correct that studio time and producers aren't "gifts" from the studio, the studio does take a certain amount of risk in fronting the money to get you into the recording studio (remember it wasn't until fairly recent that you could set up a decent home studio with your mac book pro--it used to be a very expensive proposal), manufacturing the CDs, and marketing and promoting your music.

But times are a changing: you can produce high quality recordings from your own home studio (or one of a friend), do your marketing and promotion on places like YouTube, and sell your music digitally in well known digital stores like iTunes and Napster. Places like TuneCore are currently working to change the model of taking percentages for digital delivery--their crazy thought is that if they don't offer you advances for recording studios, marketing and promotion, and aren't fighting for self space in physical stores that they aren't entitled to "exploit your masters."

They also have a free PDF about surviving the music industry that sums up what services studios provide and your alternatives. Surviving the music industy

[zunx]

Absolutely true. Only the big musicians get paid. It has been like that for too many years now. It is obscene, but true.

[rain]

Dawg eat Dog industry...
Ha.. first to say that.

If the major labels all got blown up tomorrow, and CEO's marched out and shot in public. You would see the most exciting musical revolution ever. The music would flow from roof-tops to alleys, parks to urban streets. And it would be GOOD music.
They stifle music to promote their own agenda to such a huge degree, it's insanity. The recent ruling in the US for Online Radio streaming case in point.

Good for small little independant labels to start nipping at the behemoth labels who think they are gods - of not just music, but society.

Expect Dawg to be bought out by the end of this QQ, and the lawsuit to be dropped.

[JeffDM]

Originally Posted by SpamSandwich

Of course, we all know how popular bluegrass music is these days...

Sounds like his music isn't selling.

I don't understand why you say that or why you think it is necessarily relevant to the case at hand. You should recognize that sales and rights to sell are two different issues, and the contention is that Uni and Warner didn't have the online rights to the works in question.

[JimDreamworx]

Originally Posted by Louzer

They can be culpable if they knew there were issues (say they were informed by Dawg of the infringement yet did not remove the content). And there have been other lawsuits where, say, someone claims their LCD process patent was used, but they don't just sue samsung, they also go after the PC makers who used it.

So does this mean that any record store that carries a Dawg physical product will also be named?
Doubt it... pockets not deep enough...

[Louzer]

Originally Posted by JimDreamworx

So does this mean that any record store that carries a Dawg physical product will also be named?
Doubt it... pockets not deep enough...

No, because the contracts they have would cover record store sales (that's what the contract would've been about - otherwise what would they need a contract for).

This kind of shows why older music is so spotty on the iTMS. The contracts signed then don't cover the distribution, and getting updated contracts takes effort. Especially early on, you might recall, some music would be on the iTMS one week, and then next week half of its gone. You still see older albums where half the songs are missing. The later contracts cover this area specifically, so newer stuff is complete.

BTW, this is why, when it comes to DVDs for TV shows, newer shows appear almost immediately, but some of the older shows, even popular ones, are hit or miss (well, demand has a part of that too, but definitely contracts, licensing, etc comes into play - why WKRP has been destroyed since it originally aired).

[Mr. H]

Originally Posted by rain

If the major labels all got blown up tomorrow, and CEO's marched out and shot in public. You would see the most exciting musical revolution ever. The music would flow from roof-tops to alleys, parks to urban streets. And it would be GOOD music.
They stifle music to promote their own agenda to such a huge degree, it's insanity. The recent ruling in the US for Online Radio streaming case in point.

Good for small little independant labels to start nipping at the behemoth labels who think they are gods - of not just music, but society.

That is such a load of shit. People love to use this argument, but they present absolutely no reasoning behind it. What exactly is stopping "good" music getting out now? Do you know how many thousand record labels there are? Do you have any concept of the range of choice of musical styles available now compared to say 50 years ago?

If people didn't like what's played on commercial radio, they wouldn't listen to it. If they didn't like mainstream artists, they wouldn't buy or pirate their output, and they wouldn't pay to see them live. One must assume from your comments that you dislike mainstream music; you just have to accept that you are in a minority. Big labels peddling music you don't like in no way eradicates the potential for artists you do like creating music.

[JHankwitz]

"I don't really see how they can sue Apple, given the fact that Apple was never in privy with them. Their beef is really with the labels."

One of the great privelages we have here in the US of A is the right to sue anyone for anything at any time. You don't need any reason or proof, jst a few bucks to file. It's then up to the defendants to prove their innocence.