Are streams ‘sales’ or ‘transmissions’? This particular grey area has never really been settled, even though the implications for the industry – a ‘sale’ implies a 15% royalty rate for artists while a ‘transmission’ suggests more like 50% – are considerable.
Now an existing lawsuit between 19 Recordings and Sony Music could take us a step closer to a definitive answer. The judge in the case has found that the wording in Sony’s contracts with various streaming services is, in Billboard’s words, “ambiguous”.
Which certainly doesn’t settle the issue but does, in theory, mean that the case will move forward to a summary judgement phase to decide.
That could mean disclosure of some extremely sensitive contracts, so it will be interesting to see how Sony and 19 approach the situation in the coming weeks. Suffice to say, if an ultimate ruling swung the way of “transmissions” there would be huge implications for other artists and labels.
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