Consider the source
I looked for other articles here by Steve Gordon and found one where he said he worked for Sony as a corporate lawyer. I did a Google search on Steve Gordon and finding his website at http://www.stevegordonlaw.com/ there is this statement at the bottom.
"Steve is Senior Vice President of Content, Licensing & Acquisition for MUSIC ON DEMAND, INC. m/OD is a partnership between the cable TV industry and the music business to create a subscription video-on-demand service airing music programming on cable, and selling CDs, DVDs and merchandise to the subscribers of the service."
So, someone who WANTS royalties would definitely want royalties on hardware sales. After all, if you can get someone to pay you for doing nothing, why not?
There are those who do and those who suck off those who do. Guess who is who.