I was literally just about to post about the current state of litigation between Eminem’s Eight Mile Style (his music publisher) when I got an email from Darren informing me that the case was settled. Eight Mile Style originally sued Apple, Inc. (owner of iTunes) for unlawfully selling his music on iTunes. Proceedings got underway this past Friday in Detroit federal district court. However, Yahoo news just reported that the parties have settled the matter. The financial terms of the settlement were not disclosed, but according to an Eight Mile attorney, the case was settled to the satisfaction of both parties. I am guessing that the terms were favorable to Eminem given that the case settled in the middle of trial. Should the terms of the settlement become known, I will let you know.
Eight Mile had claimed that Apple did not have a license to sell any of the 93 Eminem songs available on iTunes. They also claimed that Apple had made $2.58 million in profits from the sale of Eminem’s music. Eight Mile believed that its contract with Aftermath Records (the record company that controls the recordings) did not authorize Apple to offer Eminem songs on iTunes. In opening statements, Eight Mile lawyers contend that unique language in the agreement between Eight Mile and Aftermath required the record company to get a separate contract before it can sell downloads of Eminem’s songs over the Internet. Apple had countered that it did nothing wrong and has paid Eminem 9 cents for every iTunes download of an Eminem song. They believed Eight Mile was greedy and just out for its profits.
The fact that the case settled in the middle of trial points directly to Apple being in the wrong. Either that or Apple thought it was financially sounder to just pay up rather than drag through a potentially long trial. It will be interesting to see how the settlement affects relations between online distributors and artists. Experts predicted that if Apple lost, there would have been a restructuring of music rights which would have led to higher royalties for performers. It also could have led to certain artists’ songs not being available through iTunes. That would be disastrous to Apple and also piss off many consumers, as downloading songs and albums has become the norm with actual CD sales dropping every year.
In my opinion, I think causing Apple and other online distributors to rethink their guidelines for making songs available online is a good thing. People will still use iTunes. A broader license could result in higher royalty rates and thus higher download prices for consumers. However, I think the market will regulate things from getting too far out of control. I don’t think Apple should profit from artists’ creative property as actual album sales continue to decrease year after year. I am willing to pay slightly more than $.99 for a song if it means the artist is not getting cheated.
Let me know whether you think the curious time of the settlement indicates that Apple was wrong…or any other comments you might have.