The evolution of the music industry through streaming service, ringtones sales, music downloads, etc… asks a big issue for artists: how to consider the value of a sale or a license? How to compute royalties for digital music?
The United States Supreme Court has raised the case for a lawsuit which has involved F.B.T Production, which first signed with Eminem, against his record label, the Universal Music Group four years ago.
When Eminem sealed a contract with UMG, it stated the artist would get 50% of the royalties for a license and 12% for a sale.
After rejecting F.B.T. ‘s arguments in 2010, the Supreme Court changed its decision and refused to hear an appeal of UMG few months ago. It decided the digital music should be treated as a license.
This decision would have a huge impact for younger artists because record companies will have to change their conditions in contracts.
“Unlike physical sales, where the record company manufactures each disc and has incremental costs, when they license to iTunes, all they do is turn over one master,” said Richard S. Busch, a lawyer for F.B.T. and Mr. Martin’s company, Em2M. “It’s only fair that the artist should receive 50 percent of the receipts.” (http://www.nytimes.com/2011/03/28/business/media/28eminem.html)
http://techfreep.com/images/gavel.jpg
As far as I am concerned, I think the Supreme Court has made a fair decision. Many artists are working to produce album, they are the root of the product. Without them there will be no song, no creativity, if I may say. So they deserve the return of their works and the record companies have only to do the promotion tasks.
In this world everyone wants one’s share of the cake and we have to fight to get it.
A good point - if record companies are no longer manufacturing records then it surely changes their whole pricing model. And why shouldn't artists benefit? MInd you, the big music companies would probably argue that they lose so much to piracy that things balance out in the end.
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