Jon Healey at our sister Technology blog writes:
It's bad enough for the major record companies that CD sales are plummeting. Now, the 9th Circuit Court of Appeals is threatening to make digital downloads less profitable too.
A three-judge panel sided with F.B.T. Productions Friday in its dispute with Universal Music Group over Eminem's recordings for UMG's Aftermath label, ruling that F.B.T. was entitled to significantly higher royalties for downloadable tracks and albums sold through Apple's iTunes Store. The panel sent the case back to District Court to determine how much UMG will have to pay in damages.
UMG said it would appeal the ruling to the full 9th Circuit, and that the case wouldn't have broader implications because it hinged on the unique provisions of a single contract. Nevertheless, the victory for F.B.T. (if it stands) could embolden other hitmakers to seek higher royalties for digital downloads -- something many artists have demanded but few have obtained.
Rapper Eminem as he performs at the Grammy Awards in Los Angeles. (Matt Sayles / Associated Press)