Supreme Court won't rule on Eminem's iTunes case
updated 12:55 pm EDT, Mon March 21, 2011
Supreme Court upholds Eminem case by abstention
The US Supreme Court on Monday declined to rule on a Universal Music Group appeal of Eminem's digital royalty win. Its gesture upheld a Uinth Circuit Court of Appeals decision that said Eminem's contract with FBT Productions entitled him to a 50 percent cut of any digital sales, including iTunes and Amazon MP3. Universal had argued that it could give him the same 12 percent as with CD sales.
The earlier verdict would require a $2.2 million payment along with any forward-looking royalties.
Eminem's deal could have major ramifications for how artists with at least pre-digital contracts are paid. Those with broad contracts that aren't limited to a physical format could end up collecting much more. Artists who signed with digital factored in aren't likely to get these breaks.
Apple, Amazon and other store operators aren't directly affected by the royalty dispute's outcome, but artists like Eminem may entice labels to charge the full $1.29 per song instead of 99 cents to make up for any loss in royalties. [image via Glen Jamn]
Fresh-Faced Recruit
Joined: May 2005
Charge 1.29?
That conclusion is a bit superficial, since the retail price is more often than not dictated by what the market would bear. If Universal decides that they need greater piece of the Eminem digital pie, now that they have to give him a larger chunk than what they thought, it is more than likely that the buyers of those tracks would not exactly applaud the 30% sticker shock, which may end up bringing a severe decline in sales of those tracks and wipe out any extra revenue Universal is hoping to make. The point is, Eminem vertict entitles him NOT to $0.5 (50 cents) from every song sold, but 50% of revenue Universal receives from Apple for songs sold. So, if they get $0.88 (their share of the $0.99 price), Eminem gets $0.44; if they take $1.18 (their share of the $1.29 price), Eminem will take his $0.59. Either way, he gets half, no matter how high the retail price.
I simply can't see how Uni can make up for loss in royalties when those royalties will always be the same percentage of what they bring in.