‘American Idol’ Winners Suing For $10 Million
When a contestant wins American Idol, they are represented by 19 Recordings. Now, they're trying to help those winners get money from Sony, who, they allege, systematically underpaid its artists by manipulating the way they paid royalties for online songs.
[They have] made other improper deductions over things like music videos, has incorrectly paid royalties on joint venture compilation albums, has improperly calculated escalated royalty rates in instances of more-than-a-million-selling albums, is failing to pay over money from past lawsuits, is improperly deducting foreign income taxes, is underreporting or not reporting at all synchronization master uses in films and TV shows and more.
The lawsuit, which was officially filed last week, seeks $10 million. The suit is based on the difference in what the artists get paid when a song is "transmitted" vs."downloaded". For instance, every time you listen to “Since U Been Gone” on the radio (e.g. “transmission”), or hear it on TV (that's “broadcast”), Kelly Clarkson gets paid 50 percent of Sony’s revenue from that transmission/broadcast.
But every time you download “Since U Been Gone” on iTunes, Kelly Clarkson gets paid a little less. However, Sony classifies online streaming services like Spotify, YouTube or iTunes Radio as “downloads,” even though users treat it exactly like radio.