From Boing Boing:
Sony musicians including Cheap Trick and the Allman Brothers are suing the record label for screwing them out of their royalties on sales of music on iTunes and other digital music services.
At issue is whether the music sold through these services is a “license” or a “sale.” Sony pays less to its artists for sales than for licensing (Sony artists reportedly earn $0.045 for each $0.99 song sold on iTunes). Naturally, Sony claims that the songs sold on iTunes are sales and not licensing deals.
This is where it gets interesting. As Brad Templeton and others have pointed out, Sony and others have long maintained that what you get when you buy an iTune is a license, not ownership of a product. That license prohibits you from doing all kinds of otherwise lawful things, like selling your music to a used-record store, loaning it to a friend, or playing it on someone else’s program.
But if Sony says that it’s selling products (and therefore only liable for 4.5 cents in royalties to its artists) and not licenses, then how can it bind us, its customers, to licensing terms?
So, basically, Sony has to decide who it wants to screw over more: its artists, or its customers.