Yesterday, I picked up on the story of the Allan Brothers and Cheap Trick, two veteran rock bands suing Sony Music for claimed underpaid royalties on digital downloads. What I missed in the sources I had at the time was easily the most important point of all; Cheap Trick and The Allman brothers may just be the tip of the iceberg.

The class action lawsuit doesn't simply allege that Sony underpaid due to "packaging costs" as we stated earlier. In a press release from The Law Firm of Labaton Sucharow & Rudoff the 10,000 foot view of the case is laid out, and it's a doosey.

The allegations are, in a nutshell:

1) Sony pays royalties on only 85% of total sales of "phonorecords". The 15% fee is for "breakage". I.e. Sony and the artist have agreed to assume that 15% of the produced product will be unsaleable for damage during shipping, packing, and display. There is no shipping, packing or display in the conventional sense for digital downloads.

2) Sony deducts a 20% fee for "container/packaging charges". Container and packaging charges aren't associated with digital downloads.

3) [ Sony reduces ] "its payments by a further 50% "audiofile" deduction". I've not been able to find any explanation of what this "audiofile" charge is.

What's left of a claimed 70 cents per track after deductions is in some question (depending on how you run the math) but, 4.5 cents per track goes to the artist according to the press release. That would work out to 54 cents on an average 12 track album download. We've all heard stories about artists being locked in to bad deals and this allegation only ads to that meme.

Law is a tricky subject. You can make all the allegations you want, but it really comes down to language and interpretation. A contact case such as this has to hinge on a disagreement in the way language is interpreted. The plaintiffs say that Sony Music wrongfully treats each download as a sale of a physical phonorecord. Sony, obviously, doesn't see it this way.

Interpretation could mean a great deal in this case. According to some estimates, 2500 artists could have a stake in the class action suit. A successful class action could mean more suits against other labels, assuming that other similar provisions exist in other major label contracts written before digital downloads were an item.

Is this a trickle, or a torrent? That remains to be seen. In either event this case should prove interesting to many.