Kenny Rogers knows when to hold 'em...and sue EMI
Pirates to the left, disgruntled artists to the right...the record labels are again besieged.
The most recent challenge came yesterday when Kenny Rogers, the silver-haired country singer and actor, filed suit against EMI's Capitol Records. Rogers alleges that he was beat out of at least $400,000 and claims he's owed 50 percent of the digital-music royalties generated by his songs. He also says that EMI has dragged its feet on handing over an audit.
EMI declined to comment.
Rogers is the latest in a growing list of artists who have filed similar suits against their labels and claim they are owed royalties from digital sales. The artists include Cheap Trick and the Allman Brothers (Sony Music Entertainment), Rick James and Chuck D (Universal Music Group), and Sister Sledge (Warner Music Group).
These acts say the labels insist on paying them the same 10 percent to 20 percent rate they used to pay on CD sales. That rate factored in such losses as disc breakage and the costs to warehouse CDs. The artists argue that in a digital world, those charges don't apply.
Meanwhile, as news of Rogers' lawsuit was breaking, Sony Music was finally responding to accusations that executives tried to cash in on the death of singer Whitney Houston. Industry insiders told CNET that on Saturday, in the hours after Houston's body was discovered in a Beverly Hills hotel, a mid-level manager at Sony raised the prices on two of Houston's albums and those increases kicked in at the iTunes U.K. site on Sunday morning.
Sony Music said the price hike was a "mistake" and an "employee error." Even if you believe that, the goof was a public-relations disaster. Just at the point the public is prepared to rally around the music industry to mourn Houston's passing, her label is being accused of the worst kind of opportunism.
Don't wander off yet in disgust. There's more.
The music and film sectors threw significant resources behind efforts to get antipiracy legislation, known as the Stop Online Piracy Act and Protect IP Act, passed in Congress. The legislation once had the backing of influential lawmakers from both parties and appeared to have more than enough votes to pass. But the bills were derailed when the technology sector was able to generate significant grassroots opposition.
That certainly didn't do much to enhance the reputations in Washington of the Recording Industry Association of America and Motion Picture Association of America, the respective trade groups for the top music labels and film studios. They were once considered to be powerful lobbyists but looked puny and impotent against the tech sector.
What has to make these setbacks all the more painful is that they come at a time when overall music sales finally appear to be rebounding. In the past year, sales inched up slightly after seven consecutive years of declines.
The record companies should be taking some of the credit, after they supported cloud-music services, such as Spotify and Rhapsody, which appear to be catching on with the public.
There's also a crop of talented young stars coming up, led by British singer Adele. If some of this positive press is getting overshadowed, the labels have only themselves to blame.