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Rulings in Artist, Producer Digital Royalties Cases
The federal jury verdict for Universal Music defendants, in a suit over digital royalties brought by a production company entitled to a share of rapper Eminem's royalties, was a loss for artists and producers seeking 50% of a label's net revenues from digital download and ringtone sales of the artist sound recordings.
Last year, the U.S. District Court for the Southern District of New York dismissed a class-action, breach-of-contract complaint by the Allman Brothers Band and Cheap Trick. Allman v. Sony BMG Music Entertainment, 06 CV 3252(GBD) (S.D.N.Y. 2008). The Southern District found that sales of Sony Music artist sound masters through digital licensees for “recordings that are distributed to consumers via transmission of digital music files” were through “normal retail channels,” which would relegate the artists to the lower royalty rate for those types of sales, rather than 50% of record-label net revenues from third-party licenses. (The Allman Brothers Band have also sued Universal Music in Manhattan federal district court seeking 50% from digital exploitations of the band's Capricorn Records catalog.)
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