Eminem Sues Record Label Over iTunes Royalties

Should recording artists receive larger royalties from songs sold in digital format, such as by Apple’s iTunes? That’s the question before a California court as rapper Eminem sues recording companies for a larger portion of the revenue pie.

The lawsuit has taken two years to make it to trial, but already lawyers for the rapper have elicited that recording labels are paying less to sell digital songs.

With digital sales, recording companies, such as Universal, no longer have distribution costs, according to a plaintiff’s witness, a former executive at the recording firm.

“Manufacturing costs are for physical costs, and that has gone away,” Apple Insider quoted the former executive in answer to a question by Eminem lawyer Richard Busch about whether digital downloads forgo traditional distribution, such as CD cases, sales and store displays.

During further questioning, the former Universal executive said the company had asked Apple to pay a fee for the digital music files sold through iTunes, but said “we didn’t always manage to collect it..”

If the rapper is successful, the case could mean recording artists gain more money from each song digitally sold. A court victory could increase artists’ share of each 99-cent sold on iTunes to 35-cents, up from the current 20-cents, according to the report.

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Eminem, Apple Settle Out of Court

This isn’t the first court encounter Eminem has had with Apple. In 2004, the rapper claimed the Cupertino, Calif.-based company used his song “Lose Yourself” in TV commercials promoting its iTunes store. The lawsuit was later settled out of court for an unknown amount.

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