According to an AP article, groups Cheap Trick and The Allman Brothers allege that Sony is paying them less than what they deserve for music downloaded from popular download sites such as iTunes. Because Sony counts such sales as the equivalent of a physical phonorecording sale, they deduct costs for packaging (20%) and breakage (15%) from the artists' royalties, just as they would if they were selling CDs through more traditional means. Seeing as how there is no physical packaging, nor physical inventory that might suffer breakage, one wonders how Sony will defend against these charges."
Just thought I'd post this as an FYI ... it really goes to show that it isn't the model of music downloads that is hurting the labels and it definitely isn't Apple. Apple simply gives its 76 cents per song to the labels and lets them divide it up. Look how their dividing up these two bands royalties!