Former Sony Lawyer Predicts iTunes Royalty Increase

In 2004 Eminem’s Eight Mile Style publishing company sued Apple, Aftermath Records and Universal Music Group for the unauthorized distribution of 93 of Em’s songs in downloadable formats via iTunes.  Eight Mile claims that Apple illegally made over $2.5 million from Eminem iTunes downloads, a bulk of which came from the 2002 smash single “Lose Yourself,” off of the 8 Mile movie soundtrack.  In addition, Eight Mile Style alleged that Aftermath collected $4 million from Eminem’s music sales in partnership with Apple. 

Eight Mile Style won the suit and the appeal, entitling them to a 50-50 split with Universal for all recordings licensed to digital distributors such as iTunes. Sources said the previous rate was just 12%. 

Former Sony Music Entertainment attorney Steve Gordon says this outcome could have a huge impact on the industry, particularly those artists with contracts signed prior to 2000. Gordon told Digital Music News that “upwards of 90 percent of label agreements are ‘essentially identical’ to the Eminem contract. Those contracts are subject to a reclassification of existing ‘sales’ into ‘licenses,’ and therefore, huge royalty increases for the artists involved. 90% of those agreements haven’t been changed, and no manager is stupid enough to renegotiate.”

Watch the video for more of Gordon’s thoughts.