Eminem and other artists may gain windfall from digital music case

Eminem stands to gain from landmark digital music case

Eminem and other recording artists from yesteryear stand to benefit from the resolution of a landmark case involving the sale or distribution of digital music.

The suit was filed four years ago by the handlers of rap star Eminem against his record label Universal Music Group over royalty fees. Being debated was whether a song sold online such as through iTunes is deemed a sale or a license. For every sale,  a recording artist gets just 12 percent, but for a license, the royalty fees shoot up to 50 percent.

Eminem was not involved in the lawsuit filed by his first producer F.B.T. Productions, but the rapper, whose real name is Marshall Mathers, will earn millions due to its outcome.

"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," Joel Martin of Detroit-based F.B.T. explained to the New York Times.

Last week, the U.S. Supreme Court denied an appeal of a lower court's decision that said digital music is considered a license. Because of the ruling, Eminem and earlier artists stand to earn a lot of money from royalties.

But music industry insiders said that unlike Eminem, who signed his first deal in 1995, only a handful of young artists will gain from the case since many record labels have revamped their contracts in the early 2000s that tend to favor them instead of the artists when it comes to digital music earnings.

Older artists who have not released an album in decades but continue to have their songs sold online are the expected beneficiaries of the ruling along with Eminem.

Posted by Kade Quinn on Monday March 28 2011, 4:24 AM EST. Ref: NYT. All trademarks acknowledged. Filed under Entertainment, Featured News. Comments and Trackbacks closed. Follow responses: RSS 2.0