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In short: Spotify was so convinced that it would be successful that it agreed to a deal where it would pay a significantly reduced royalty in its first couple of years of operation, with payments stepping up after that launch period to reflect the huge cash cow that the product would become.
As they do, publishers confront another headache: authors and their agents alarmed that publishers have gained control of the price of e-books but are providing authors with a reduced royalty.
At the very least it could work out some reduced royalty rate during the trial so if a user plays an artist's music non-stop or quits at the end of the three months, the musician isn't totally screwed.
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Clear Channel was a supporter last year of the Internet Radio Fairness Act, a bill that would have reduced royalties for online radio; it died in committee after loud opposition from the music industry.
So Tuesday's news, while rough, shouldn't shock anyone: Brewster's firm warned that fiscal first-quarter sales will likely drop 24% from the year-earlier period, citing fewer company stores as well as diminished sales to franchisees, and reduced royalties and fees from franchisees.
In 2003, Peru reduced royalties to promote investment, sparking a new exploration boom.
But Mr. Wall is now concerned that foreign ownership of Potash would reduce royalty and tax revenues.
The authors argue that in reducing royalty payments, the publisher is maximizing its profits and the profits of its parent company at their expense.
It supports the Internet Radio Fairness Act, a bill in Congress that has been championed by Pandora, which could reduce royalty rates.
Meanwhile, Microsoft Corp. was reportedly charged $140 million in back taxes, and American semiconductor manufacturer Qualcomm was ordered to reduce royalty payments.
In the lawsuit the authors say that Eagle sells or gives away copies of their books to book clubs, newsletters and other organizations owned by Eagle "to avoid or substantially reduce royalty payments to authors".
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com