Declan Colgan Music Ltd (DCM), which own the mechanical rights (the original version of the track) to “21st Century Schizoid Man,” claim that UMG has been underpaying on streaming royalties arising from “Power.”
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According to the lawsuit, West originally sampled the King Crimson track without a license before uploading the track to YouTube in 2010, where it has since garnered almost 134 million views. He also included “Power” in his fifth studio album, “My Beautiful Dark Twisted Fantasy.”
When DCM became aware of West’s copyright infringement, they contacted UMG, who — along with West and his production company Rock the World — signed an agreement with DCM two months later legally allowing West to sample the King Crimson track in return for a 5.33% royalty on each copy of “Power” that was sold or “otherwise exploited.”
According to the terms of the license agreement, UMG are required to pay DCM a royalty on the same terms that West receives royalties from the track. And under the terms of West’s agreement with UMG at the time, the royalty figure for a streaming track was equivalent to that of a track on a physical CD.
However, DCM claim in their lawsuit, which was filed in the U.K. High Court last month, that UMG “has failed, and continues to fail, to comply with its royalty accounting obligations in respect of one mode of exploitation, namely the making available of the Power [r]ecording to consumers through so-called ‘streaming’ services.”
Effectively, they argue that UMG should be paying streaming royalties based on the sums they would have received if those streams had been physical CD sales, as per the 2010 contract. Instead, according to the suit, UMG have been paying a percentage of what they actually receive (from platforms such as Spotify) for each stream, which is a lower amount than it would have been for CD sales.
DMG are now seeking payment of all sums due as well as interest. They also want the court to make a declaration setting out the correct basis upon which to account for streaming royalties.
The suit comes as artists in the U.K. seek fairer terms for streaming royalties from major labels, with the U.K. Department of Culture, Music and Sport investigating the economics of music streaming.
Representatives for UMG did not respond by press time. DCM’s attorneys declined to comment.
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