Eminem firm loses iTunes royalty lawsuit against Universal
The Detroit production company involved in Eminem's early albums had previously filed suit against Universal Music, seeking more royalties on songs sold online versus traditional CD sales.
However, a Los Angeles jury late last week sided with Universal's arguments, agreeing that a song sold online is no different from a song bought in a store.
"We are pleased with the jury's verdict," said Universal spokesman Peter Lofrumento.
Bloomberg News reported FBT Productions, which signed Eminem before he came to prominence, was seeking $1.47 million in damages.
An FBT victory could have dramatically changed the pecking order for proceeds from digital downloads, such as Apple's dominant iTunes Store.
The jury's decision means record labels will continue to control most of the revenues from album sales. Artists and production companies have called for more proceeds from the online music marketplace as the record labels' overhead is much lower since companies like Apple are responsible for the marketing, management, delivery, and so on.
The production company had argued their contract entitles them to more proceeds for songs sold online. It reasoned that the tracks the label provides to services like iTunes and Amazon are music "masters", used for reproducing endless digital copies. FBT, owned by brothers Mark and Jeff Bass, said their contract entitles them to higher royalties on music "master" sales, but the jury did not agree.
Eminem was not a party to the suit, although he would have earned much more in unpaid royalties had the jury sided with FBT. Lawyers for FBT said they will appeal the jury's ruling.
The brother-owned company did prevail on a separate claim involving underpaid royalties, netting a minor victory. Universal was ordered to pay $159,000.
34 Comments
$1.47M?! That seems like such a low amount to sue over these days. I guess I'm desensitized with all the talk of billions.
wow, that is not good, the court is saying that cost for online music is the same as making and distributing a CD.
Remember artists get a % of sale after costs, What Eminem was trying to show that cost for online music is far less so they should earn more royalties.
Cost for MP3 is far less then CD, you make one copy and down load it millions of times. CD you have to make millions of copies and hope someone buys them. Variable costs are so much less with MP3 and any CD. The artist should make more.
Once the contracts the artists have expire, the artists need to not re-sign, but form their own "label" so they have more control over their music and money. I highly doubt Apple cares which label music is released by since their model for distribution and payment is pretty straight forward. The only "problem" the artists will have is they will not have the money and expertise that the big labels have at their disposal, but if they have money for their clothes, mansions, cars, and "bling", then they should have money to at least fund their musical expenses that will in turn provide them with income.
So, what does this mean for the record company's contention that songs bought online are simply licensed to the end user not sold, and thus the end user has no right to sell the song?
Is this not a complete double standard? How can they pay the artist less because it is a sale and not a license, but get around the Doctrine of First Sale by saying it is a license not a sale?
Can anyone explain this one legally?
Can anyone explain this one legally?
Yes, it's called being bastards.