A battle between music company 19 and Sony Music looks set to be litigated in court, as the parties have seemingly failed to resolve matters amicably between themselves. Music company 19 owns the rights in the global Idol franchise, including hit US show American Idol, which has attracted millions of viewers and provided a publicity platform for emerging artists. The company also manages the finalists who appear on the show. Sony Music was given the exclusive rights to sign the finalists and the parties appear to have fallen out in relation to the contracts signed between Sony and the artists.
The key gripes for 19 revolve around fees and whether income from digital sales should be treated as a sale or the granting of a licence to a purchaser for the purposes of calculating artist royalties. Sony filed to have 19’s claim for breach of contract struck out in March 2015 but was ultimately unsuccessful. It was partially successful in appealing the decision against it, in that an appeal judge agreed with Sony that it had not acted in bad faith towards 19 with regard to digital royalties. Sony also filed a counterclaim for repayment of excess monies it allegedly paid to the artists. It now appears that the key breach of contract dispute will be decided before a US court.
To complicate matters, 19 has filed for an appeal against the decision to strike out the digital royalties issue, arguing that the issue should be decided at trial alongside the breach of contract matter. The issue is of particular importance to 19, given that sales (or licences, as the case may be) of digital content have soared whilst the sale of CD’s has dwindled in recent years. More pre-trial posturing is expected before this matter comes before a court, and a settlement without the court’s intervention is still possible as the parties reassess their respective positions.
