Monday, March 28, 2011

Pay for Play

It's about time.

Four years ago, the producers who discovered Eminem sued his record label, the Universal Music Group, over the way royalties are computed for digital music, which boils down to whether an individual song sold online should be considered a license or a sale. The difference is far from academic because, as with most artists, Eminem’s contract stipulates that he gets 50 percent of the royalties for a license but only 12 percent for a sale.


The suit reached its apparent end last week when the Supreme Court refused to hear an appeal, letting stand a lower court’s decision that digital music should be treated as a license. Lawyers and music executives say that few younger artists are likely to be affected by the decision because since the early 2000s record companies have revised most of their contracts to include digital sales among an artist’s record royalties. Eminem’s first contract was signed in 1995.

Many older artists, however, whose contracts predate digital music and have not been renegotiated, stand to profit significantly from the decision.

Limiting payments to artists, assuming it ever made much sense, only did so in a world where record companies had expenses: you know, production and publicity and the creation of a physical product that has to be manufactured and stored and shipped.

We don't live in that world anymore. Paying someone half for being a conduit for your bytes even seems a little outrageous.

And as anyone who has ever tried to transfer iTunes from an ailing computer to a new device knows well, consumers do not actually own that music: DRM means we're just renting it for a while on the company's terms. Definitely a license, not a sale.

But at least this is a gesture toward a more equitable pay structure for artists.