‘American Idol’ Winners Sue Sony
Artists including Carrie Underwood and Kelly Clarkson, along with 19 Recordings, claim that Sony negotiated “to be paid a royalty rate that is substantially below fair market value so that it can receive other compensation that it does not have to share with 19 and its artists.” They are seeking to add the claim to a federal lawsuit filed last year where they claimed Sony was shorting them royalties, according to the Tennessean.
“While we have not seen the agreements between those other record labels and Spotify, on information and belief, those other labels have in most likelihood engaged in the same self-dealing as Sony with respect to the diversion of payments to them, and below market streaming royalty rates,” the filing reportedly says.
“The issues being raised here are important to 19 and the artists involved, and potentially many other artists whose music is streamed,” the plaintiffs’ attorney, Richard Busch, told the Tennessean. “We look forward to pursuing all of the claims in this lawsuit.”
Sony lowered its royalty rate with Spotify in exchange for a share of Spotify’s advertising and other revenue, which Sony would not have to share with its artists, according to the lawsuit.
The claim comes as Taylor Swift and Apple Music have made news around the world because of their difference of opinion regarding the latter’s upcoming launch.