Cheap Tricks: Sony sued over iTunes revenue

mp3.com (now there’s a blast from the past!) reports that Cheap Trick and Allman Brothers Band are suing Sony over the amount paid to them for digital downloads of their songs through iTunes. It’s a contractual disagreement centering around the amount paid to artists for each downloaded song. While Sony claims artists should be paid 4.5 cents per download (equivalent to what they are paid for conventional CD sales) the bands think they should be paid 30 cents per download, on a par with synchronization royalties (for example, when their music is added to a film or other medium).

It really puts CD Baby‘s offering to indies (60 cents per download) in perspective. In many ways, independent musicians get a far better shake online than do their major label counterparts. Of course, this is partly due to the successful efforts of independents pushing for a higher payout from iTunes last year.

Still, Apple pulls the important strings. For now, they’re content with their 29 cent cut per download. But things can change rapidly in the digital music industry, and the pressure to go mobile might drive up prices due to more middlemen (telcos) demanding a piece of the action (can you guess which part of the supply chain will get their revenue share diminished?).

Better yet, consider how quickly things already have changed. Only three short years ago, no one was paying anything for mp3s.

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