Had the recent jury verdict in the case filed by Eminem's production company gone the other way, many believe we could have been looking at a very different digital music landscape.
The case challenged the way digital copies of artists songs are treated when calculating royalties and could have paved the way for other artists to receive millions of dollars more from their record labels. While more recent contracts clarify how these transactions are treated for royalty purposes, contracts that pre-date the onset of digitial download services such as iTunes were typically silent on the issue. FBT Productions, the producers who first signed Eminem, argued that digital downloads should be treated as licenses rather than distributions. Had the Eminem camp been successful, this earlier generation of contracts would have been subject to a new interpretation that could ultimately have led to record companies owing millions of dollars to artists. Such a victory would have created waves felt throughout the industry.
Given that the jury determined that the digital downloads were not licenses of the work, but in fact distributions as the record labels have long contended, does this go back to being a non-issue in the industry? Will labels, artists and other stakeholders now accept that this new form of content delivery is really not all that different from old-fashioned transactions in which a physical product changed hands?
Perhaps for purposes of calculating royalties that will be the case, but then again the finer points of that have already been worked out for record contracts going forward. The real question is have any of the main players in the music industry begun to give serious consideration to how music will be consumed and enjoyed in the years to come? A fight over how to treat digital downloads may seem like a big deal now, but it may pale in comparison to how the world of music is changing every day. Slim Shady may have lost this battle, but the eventual winner of the war is far from certain.
