Universal settle with FBT over digital royalties dispute

December 2012

Record labels, artists


I am slightly disappointed to report that FBT, early producers of Eminen, have settled their dispute with Universal over the rate at which royalties should be paid on digital product, having successfully argued on appeal in the US courts (Ninth Circuit) that a bigger share of revenues applied to digital sales – a share of licensing revenues rather than the ‘per unit’ royalty applied to physical sales. The Supreme Court refused to hear UMG’s appeal.

The case will spare UMG having to reveal what royalty rates it will pay FBT, aka The Bass brothers,  and as importantly will save UMG having to reveal what royalty reducers it applies to international royalties before any royalty calculation is made. FBT had planned to challenge how Universal deals with international revenues, and the tendency for substantial portions of revenues to stay with local Universal divisions, so that UMG only has to pay the artist a share of the 29% of total revenue that ends up with the US division to which Eminem and FBT have their direct deal. Again the producers planned to argue that this was unfair in the digital age, where the cost to the record company of making music available in multiple territories is so much less once CDs are taken out of the equation. That issue will now not get a public hearing from this case.

FBT join Cheap Trick, the Allman Brothers and a number of other Sony artistes in settling a similar claim made against Sony. A number of artistes are maintaining claims asking for increased royalties and the growing list includes country star Kenny Rogers, rockers Whitesnake and Rob Zombie, Chuck D, James Taylor and the Rick James estate, and heritage acts including Toto, Sister Sledge and The Temptations,

FBT Productions LLC et al v Aftermath Records (2010)


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