James Taylor Sues Warner Bros For $2 Million Over Digital Royalty Payouts

Rock & Roll Hall of Famer James Taylor is now in a legal battle with his former label Warner Bros Records for $2 million, claiming that the singer has not been properly compensated for his digital music sales. Along with Taylor against Warner Bros includes several other high-level musicians including Peter Frampton, The Temptations, Kenny Rogers and Eminem – all of whom believe that they should be earning higher royalty rates for their downloaded material.

Taylor’s primary complaint involves the digital sales from online retailers. Warner Bros essentially treats digital downloads the same as CD sales, but Taylor argues that the label is licensing tracks to the retailers and should therefore exercise different payout structures. Warner Bros has signed a single licensing deal with retailers like Amazon and iTunes, allowing songs to be sold in perpetuity.

While these deals typically provide artists with just 10% of the sales revenue, licensing deals can allow artists to earn up to 60% of royalties - quite the difference. Taylor's current rate with Warner Bros is at 50% for digital downloads, but the label feels that the he should not be eligible for a higher rate.

When Taylor left Warner Bros in 1979, he had signed a termination and settlement agreement with the label, which he believes they have violated. In addition to the discrepancies with the digital payouts, Taylor and his legal team have alleged that Warner Bros has not been properly paying royalties for international sales and has also charged the label with unauthorized use of Taylor’s material from releases on compilation albums.

Much of this legal battle stems from a legal case in 2010, where F.B.T. Productions won a ruling where they felt that Eminem's digital sales should be treated under the licensing provisions of his contract, which sets the precedent for the case between Taylor and Warner Bros. Since that ruling, a number of other artists have also filed similar suits including Chuck D, Rob Zombie, and Rick James. Taylor's lawyer, Richard Busch, has previously represented many artists in similar royalty disputes, which makes him no stranger to the legal battle at hand. 

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Hisham Dahud is a Senior Analyst for Hypebot.com. Additionally, he is the head of Business Development for Fame House and an independent musician. Follow him on Twitter: @HishamDahud