Eminem’s producers, FBT Productions has prevailed in a case against Apple and Universal over Eminem digital royalties, and the victory could have a huge effect on digital music sales.
The San Francisco Court of Appeals last week rejected a previous decision that iTunes sales and ringtone royalties should be counted in the same way as CD sales, but should instead be accounted for as masters licensed for re-use — a use for which a 50 percent share of net receipts received by Universal and Apple should be paid.
This follows the decision by a lower court last year which argued that digital sales should count in the same was as CD sales.
One of the world’s biggest-selling artists, Eminem’s people are demanding half the net receipts Universal gets from digital music and ringtone sales, rather than standard royalties. That’s significant cash, so no wonder then that Universal intends to fight this case tooth and claw.
“The agreements unambiguously provide that notwithstanding the records sold provision, Aftermath owed FBT a 50 percent royalty under the masters licensed provision,” the three-judge panel said in its ruling. “Because the agreements were unambiguous and were not reasonably susceptible to Aftermath’s interpretation, the district court erred in denying FBT” its pretrial ruling.
“In the meantime, it should be noted that this ruling sets no legal precedent as it only concerns the language of one specific recording agreement,” a Universal Music Group spokesman said in response.