In February 2014, 19 Recordings—a record label representing artists from the TV show “American Idol” like Kelly Clarkson and Carrie Underwood—sued Sony Music for allegedly withholding royalty payments totaling $7 million. In March of this year, U.S. District Court Judge Ronnie Abrams issued a ruling allowing some of these claims to go to trial. The upshot is that, while some components of the case will move forward, the court decided that others don’t hold water. Even more recently, Sony swung back with allegations of fiduciary mismanagement at 19.
Let’s say you’re approached by David Copperfield (it’s OK, don’t run!), and he asks you to be an audience plant for his next big televised spectacle. You’ll be privy to some behind-the-scenes secrets, and outing his magic as merely illusion could be a disaster for his career—other magicians will cop his tricks, his performances will lose their coveted mystique, etc. That’s no good. So to make sure you keep your lips zipped, he presents to you (pulled out of a hat, probably) a non-disclosure agreement. This is a contract that says your discussions regarding this particular event are strictly confidential, and if you go blabbing he can sue you for breach of contract.
Non-disclosure agreements (NDAs) in this context seem pretty straightforward, but what about all the NDAs that pervade the music industry? Why all the smoke and mirrors obfuscating the terms of agreement between streaming services and major record labels, or deals between aggregators/distributors and YouTube?