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More legacy artists sue for bigger digital royalty share

By | Published on Monday 23 May 2011

Universal Music

Another batch of musicians with pre-internet record contracts are pushing for a bigger cut of digital royalties based on the precedent set in the much previously reported FBT Productions v Interscope case.

As previously reported, the FBT team, who have a stake in the early Eminem recordings, successfully sued the Universal Music subsidiary arguing that money generated from download sales should be classified as licensing income rather than record sales income within the music major’s accounts. This is an important distinction because artists are often contractually due a considerably higher share of revenue generated by licensing deals as opposed to that that comes in from record sales.

FBT weren’t the first artists with pre-internet contracts (which, of course, make no specific reference to download revenues) to make this argument, though previous claims of this kind were, in the main, unsuccessful in court. Universal insists the FBT case relates specifically to the wording of its contract with the hip hop producers, but lawyers for other legacy artists signed to the record company aren’t convinced by that argument.

Last month, the estate of the late Rick James was the first to sue for a bigger slice of digital royalties using the FBT case as a precedent, and now, according to the Courthouse News Service, Rob Zombie, Whitesnake and Dave Mason have filed a federal class action making a similar claim.

Reporting on the new lawsuit, the New York Times confirms: “In all of these cases, the artists or their associates say that their record company violated their contracts by counting a digital download as a sale instead of a licensing, which would result in a substantially higher royalty”.

Universal Music is yet to respond.