By Lindsay Fortado, Business Week.
March 9 (Bloomberg) — Pink Floyd, the band that recorded the best-selling album ‘The Dark Side of the Moon,’ is suing record label EMI Group Ltd. in London over online royalty payments and the sale of single tracks.
The band is asking for clarification to their more than 10- year-old recording contract with EMI, Pink Floyd’s lawyer, Robert Howe, said at a hearing in a London court today. When their contract was negotiated in 1998 and 1999, “both parties were faced with a whole new world of potential exploitation,” Howe said.
“It was unclear whether record companies would be selling direct to the consumer or through retailers,” Howe said. Apple Inc.’s online music retailer iTunes “wasn’t launched in the U.K. until 2004. These negotiations were taking place six years before that.”
An increasing number of consumers buy music online and shun older sales formats. Digital sales of music accounted for 27 percent of revenue at the biggest record companies last year and global revenue from music via the Internet and mobile phones rose 12 percent to $4.2 billion in 2009, the International Federation of the Phonographic Industry said in January.
Pink Floyd’s contract with EMI says albums are to be sold as a whole with tracks in a specified order and not as singles, Howe said. That should include the band’s music sold online, he said.
“It’s a matter of fact that the defendant has been permitting individual tracks to be downloaded online and that therefore they have been allowing albums not to be sold in their original configuration,” Howe said.
‘Seamless Pieces’
“Pink Floyd is well-known for performing seamless pieces,” he said. “Many of the songs blend into each other.”
EMI, owned by Guy Hands’ Terra Firma Capital Partners Ltd. private equity group, was granted a request to have part of the hearing heard without the media present.
Elizabeth Jones, a lawyer for EMI, said the restrictions in the band’s contract refer to physical albums and not ones sold online.
“In 1999, when it was negotiated, iTunes didn’t even exist,” Jones said. “I can’t say it’s obvious from the agreement what the commercial intent of the parties was. I’m sure the claimants would have liked to protect their records and EMI would have liked to have had full control to exploit.”
EMI spokesman James Devas declined to immediately comment on the case.
Pink Floyd filed the lawsuit in April last year.
The case is Pink Floyd Music Ltd v. EMI Records Ltd., 666/09, High Court of Justice, Chancery Division (London).
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