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Warner Music launches website to explain proposed digital royalties settlement

By | Published on Tuesday 18 February 2014

Warner Music

Warner Music yesterday formally announced its proposed settlement in response to a class action lawsuit on the whole digital royalties issue.

As much previously reported, many heritage artists (with pre-iTunes record contracts) reckon that they should be paid a bigger cut of the revenue generated from downloads, because such income stems from licensing deals between the labels and the digital firms, and a classic record contract pays a bigger cut to artists on licensing income versus record sales. For their part, the labels say that download income doesn’t qualify as ‘licensing’ revenue in that sense.

Numerous artists have gone legal on the matter since early Eminem collaborators FBT Productions succeeded in getting a bigger download royalty from Universal through the courts. Even though the majors continue to deny the higher licensing cut should be paid on download income, negotiations nevertheless continue to settle most of the legal disputes, though some lawsuits have been classified as class actions, which require proposed settlements going before a judge.

Warner unveiled its proposed settlement to such a class action late last year, offering to increase future download pay outs to artists with pre-iTunes contracts by up to 5% with a 14% cap. The major also said it would set aside $11.5 million to provide artists with some extra payments related to past download sales, though legal reps for the litigious artists would also get paid out of that fund.

Yesterday Warner launched a website for American artists signed to the major’s labels who are eligible for this settlement, providing more information about the deal and the process acts would have to go through to make a claim. Though, a statement issued announcing the site adds that “Warner Music Group denies any wrongdoing” in the way it has paid out digital royalties to artists in the past.

A statement from Warner’s attorneys also notes: “[Eligible artists] who want to keep the right to sue Warner Music Group must exclude themselves from [this] settlement by 31 May 2014. People who stay in the settlement may object to it by 31 May 2014. People who do not exclude themselves or who do nothing will be bound by the court’s decisions”.

More information about the settlement is online at this site.