“Digital income. It’s a topic that continues to cause fits in the music industry, and if there’s one big moment when record companies probably realized that a new day had dawned in their business, it was September 3, 2010, the day the 9th Circuit Court of Appeals handed down a huge decision in a path-breaking case involving the music of hip-hop superstar Eminem.
Leaked Audit in Eminem Royalty Suit Highlights Huge Stakes for Record Industry
Two years after that appellate ruling, many other musicians have since brought claims over digital income.
Now, the case has settled. On Monday, FBT Productions and Universal Music Group informed a California federal court a resolution had been reached, putting to rest a dispute that has been closely followed throughout the industry.
If the birth of Napster pointed to change in the way songs would be distributed online, and if the rise of iTunes signaled that money could still be made in the selling of music, it was the 2010 appellate ruling in FBT Productions v. Aftermath that offered the fearsome prospect for many record labels that artists would soon be entitled to a much larger share of revenue generated by the exploitation of sound recordings.
The case pitted Eminem’s production team of Mark and Jeff Bass against Eminem’s record label.
Originally filed in 2007, a jury verdict two years later was a defeat for the plaintiffs, but then the case went on appeal.
At the 9th Circuit, the judges ruled that a lower court had erred by not deeming the label’s agreements with third-parties download providers as licenses instead of sales. For the music industry, the difference was enormous. Under typical licensing or leasing provisions of artist-label contracts, about 50 percent of collected revenue gets handed over to artists. Under sales provisions, it’s usually not more than 15 percent. . .”
THR, Esq. has the full story.