Record Companies Are Now Suing Mobile Carriers For Royalties

It seems as though record companies have developed a new game plan in order to collect royalties. As we all know, the music industry attempted to sue individual users who illegally downloaded songs. But because of this approach to recover from major fiscal loss has destroyed their public image.

Rather than lowering the cost of albums in order to compete with free music circulating through the internet, record companies have turned to collection agencies who are now suing cellphone companies over royalties from ring tones. They contested that ring tones counted as public performances and therefore cell phone companies should be obligated to pay performance fees. The courts quickly shot this down.

Despite this unfruitful endeavour to collect on royalties, Broadcast Music Inc is now suing T-Mobile over ring back tones, alleging that the mobile carrier is selling them without licensing agreements. Unlike ring tones, which play publically when someone calls, ring back tones are only heard specifically by the person calling. Instead of hearing a cellphone dialing, the caller will hear a song that was chosen by the cell owner.

Music lovers are quick to point out the contradictory nature of this lawsuit. If ringtones that can be heard by anyone around a cellphone that is being called, do not equate to a public performance, it seems absurd to sue the mobile carriers over a ringback tone that can be heard only by the caller. Record companies seem to be grasping at straws as they suffer from huge financial losses.

It does not appear that lowering the cost of CDs, DVDs and other media is an plan that has occurred to the music industry. There are still quite a few fans out there that prefer to collect and own the actual products, but with prices constantly spiking, downloading music for free seems very appealing. Many CDs generally go on sale for about seventeen dollars.

Specific bands have been skirting the issue of music downloading through unique tactics. Radiohead, an alternative rock band, established a website where fans can download the music for free, or for a donation. Nine Inch Nails’ Trent Reznor has followed suit. With record companies’ unsuccessful lawsuits and declining public image, it seems as though thinking outside of the box and fair pricing may be more effective than bullying money out of mobile carriers and individual users.

Mallory Megan is employed by a debt collection agency. She also writes stories on business and finance, consumer spending and collection agencies.