The Posthumous Battle Over “My Sharona”
In June 1979, an LA band called The Knack came out of nowhere with a single called “My Sharona” which rocketed to the top of the Billboard Hot 100 and stayed there for six weeks. It went gold faster (I seem to recall 12 days) than any record released in America since the Beatles’ “I Want to Hold Your Hand.”
The album from which it came, Get the Knack, went platinum in just two months and spent five weeks at #1. Not bad for a record made in two weeks for a total cost of $18,000.
In short, the Knack was quite the sensation. For a while.
A second single, “Good Girls Don’t” did well (#11 in America), but that was pretty much it for the Knack. Popularity turned to scorn and they became the butt of jokes about 80s bands.
Yet at some levels “My Sharona” (and a few other songs) never really faded away. It showed up in TV shows, movies, commercials and on retro compilations. It continued to generate revenue. The Knack had a nice little annuity going for them.
But then came the digital age and the Knack ran into a problem that’s plaguing many, many older artists. What royalties was the band owed for what the song brought in with digital distribution?
It comes down to whether selling a song through a service like iTunes is a “sale” or a “license.” The distiction is very important because each comes with its own royalty rate. There’s much more in it for the artist if these digital tracks are licensed for iTunes, Amazon, other legal downloads, and ringtones.
With a CD (or vinyl or cassette or anything physical), you’re buying a physical item. When you purchase a download, there’s nothing physical to the music except a bunch of zeroes and ones. When you click “purchase,” a copy is made of a master file that lives on a server somewhere. The way the law looks at these things (as I understand it, anyway), you think you may have purchased the song, but you’ve really just purchased a license to listen to that song. (Legal peeps: please correct or otherwise elucidate on this matter in the comments section.)
Record labels would rather pay the royalties due to the sales of “phonorecords” (i.e. physical goods like vinyl, cassette and CDs) and not the licensing of the master because the royalty rate is much lower. Digital license royalties can be as high as 50%.
Drummer Bruce Gary died in 2006 on Non-Hodgkins lymphoma. Singer Doug Fieger died of lung cancer in 2010. Felice Catena, the heir to Bruce’s estate, has sued Capitol records for unpaid royalties based on this distinction between “sale” and “license.”
Both sides of the music industry will be watching this case very, very closely because the outcome may have major implications for how much artists will be paid–especially those who came before the digital era.
