updated 12:35 pm EDT, Mon September 6, 2010
Could have echo effects in music industry
Eminem producers FBT Productions have scored a significant upset in a case against Universal Music involving iTunes royalties. A court of appeals has rejected an earlier court decision, which suggested that song and ringtone sales at iTunes could be treated in the same way as CD sales, generating only 12 percent in revenue for the music's creators. If carried through, the ruling will instead see Universal sublabel Aftermath pay FBT 50 percent of its related intake, under a contract provision that treats iTunes sales as reusing masters.
Although ruling may apply explicitly to the relationship between Aftermath and FBT, it could potentially have larger ramifications in the music industry. As a result of Eminem's success, Universal may have to pay FBT substantial amounts of cash. It could also lead to other musicians and production studios demanding a better share of digital royalties.