Eminem Sues Record Label Over iTunes Royalties
8:36 am, February 26th, 2009, Ed Sutherland
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.
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.
Posted by Ed Sutherland in News | Comment on this article
Hell, the labels are still deducting/charging artists for ’spillage/breakage’ on digital sales (ie, they physically make 10,000 CDs, but only 9,200 of those actually get sold, so the labels don’t pay the artist for those ‘lost’ CD’s). The labels have worked out a percentage that they apply to everybody (generous for the labels, I’m sure), and they still apply this same percentage to digital downloads, which have zero ‘breakage’ (I guess, short of somebody creating a hack for iTunes that lets a bunch of people download songs for free).
dave, on February 26th, 2009 at 11:39 am