Digital Notes: Sony Offers $8 Million Settlement Over Royalties

Ending a six-year dispute, Sony has offered an $8 million settlement in a class-action lawsuit over royalties for digital music. The case, originally filed by the Allman Brothers and Cheap Trick, was one of the first in what is now a wave of litigation by artists accusing major record companies of underpaying royalties by counting downloads as “sales,” like CDs, instead of as “licenses,” which pay much higher rates. (Royalties might be anywhere from 5 percent to 20 percent for sales, while 50 percent on a license is standard.)

The Allman Brothers and Cheap Trick have since settled their own claims in the suit, which was filed in 2006. But two other acts took their places as lead plaintiffs — the folk-rock band the Youngbloods and Elmo Shropshire, who sang “Grandma Got Run Over by a Reindeer” — and a large pool of acts may be eligible for class status. According to the terms of the settlement, which is subject to court approval, $7.65 million of the settlement would go to artists who have sold a minimum of 28,500 tracks on iTunes; lawyers’ fees would be taken out of that portion. A pot of $300,000 would go to artists with lower sales.

Last year, a group of producers for Eminem won a similar suit against Universal. In the wake of that decision, numerous artists have sued, including Sister Sledge, Chuck D. and the estate of Rick James.

Vevo’s New Design: Vevo, the two-year-old music video site owned by Sony and Universal, has updated its design to link it more closely with Facebook, as Spotify and other services have done. As explained in a company blog post, a Facebook account is now required to log into Vevo, and the site will make playlist recommendations based on a user’s “likes” on Facebook. (It can also read the songs on an iTunes account.) Vevo has a distribution deal to stream its videos through YouTube, but the change is seen as a competitive step between Facebook, which is trying to make itself a hub for entertainment content, and Google, which owns YouTube.

Spotify in Germany: In the latest example of international expansion of digital music services, Spotify will open in Germany on Tuesday. It will be Spotify’s 13th country of availability, and there Spotify will face competition from Simfy, a home-grown service with two million users, and Rdio, which opened there in January.