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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]

by MacNN Staff



  1. vasic

    Joined: Dec 1969


    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.

  1. Flying Meat

    Joined: Dec 1969


    Well, not realistically, but

    they could jack up the price per track to 2.50-ish (math stranger at work :P ).
    The Universal share would be about what they were getting before-ish, if the sales didn't fall way off, as they likely would.

  1. eclux

    Joined: Dec 1969


    What star system are these people from anyway?

    Leave it to the Uinth Circuit Court to sow confusion about royalty issues here in our galaxy. What will they say next? All our bass are belong to them?

  1. SierraDragon

    Joined: Dec 1969


    Do not blame the court...

    ...for the crazy contracts of the music biz. Eclux, how can you fault the Circuit Court for doing its job and adjudicating an appeal to a contract dispute that the Supreme Court did not disagree with? Are you just upset that courts all the way to the Supreme Court declined to rule against an artist?

    It seems to me that the value-add of the studios has generally not justified the huge payments sucked up by the studios. I do not often listen to Eminem's music but I congratulate any artist who wins in the artists versus studios wars.

  1. macs4all

    Joined: Dec 1969


    Labels Really Protecting Artists, eh?

    Now look for another round of MAFIAA lawsuits, claiming that "piracy" is killing the profitability of the music business.

    Yep, I see how Universal is "looking out" for its "talent" (quotes meant literally and figuratively). By arguing that their own contracts with their artists aren't binding, and don't mean what they say.

    Any artist not publishing music independently at this point deserves what they get. The "labels" are beginning to see the writing on the wall. It's a new day for musicians, and the independence of today's artisans is just beginning to be felt by the "industry" as a whole.

    Good riddance to bad rubbish, I say.

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