Toto File Suit Over Unpaid Digital Royalties
Labels and heritage acts continue to have a difference of opinion on fair compensation for sales of digital downloads -- and Toto is the latest act filing suit in an attempt to get what they believe is their proper share of royalties.
The digital content, including big hits like ‘Rosanna,’ ‘Hold The Line’ and ‘Africa,’ is licensed to download partners like iTunes and Amazon. And because it's a licensing agreement, the suit argues, it should be treated the same as other licensing agreements -- which means a hefty increase in revenue.
When music is licensed to a third party, agreements typically pay the artist 50 percent of the proceeds, as opposed to the between 12 and 20 percent royalty rates paid for CD sales.
The lawsuit alleges Sony has failed to properly compensate Toto for the sales of their masters, and that the label failed to allow Toto a fair opportunity to conduct an audit. On top of that, the band says Sony is attempting to recoup money that is not owed to the company.
They’re seeking a full accounting, as well as damages in excess of $650,000 plus interest and attorneys' fees. They also want a declaration that Sony is obligated to pay 50 percent of net receipts for future sales in the digital arena.