Four years ago, the producers who discovered Eminem sued his record label, the Universal Music Group, over the way royalties are computed for digital music, which boils down to whether an individual song sold online should be considered a license or a sale. The difference is far from academic because, as with most artists, Eminem’s contract stipulates that he gets 50 percent of the royalties for a license but only 12 percent for a sale.
“As of now it’s worth $17 million or $20 million, but on a future accounting basis, five or 10 years from now, it could easily be a $40 million to $50 million issue,” said Joel Martin, the manager of F.B.T. Productions in Detroit, which first signed Eminem and continues to collect royalties on his music. (Marshall Mathers himself, who performs as Eminem, was not a party to the suit, although he stands to earn millions from it.)
The suit reached its apparent end last week when the Supreme Court refused to hear an appeal, letting stand a lower court’s decision that digital music should be treated as a license. Lawyers and music executives say that few younger artists are likely to be affected by the decision because since the early 2000s record companies have revised most of their contracts to include digital sales among an artist’s record royalties. Eminem’s first contract was signed in 1995.
@ NYTimes
