Universal Music has come to a settlement with a substantial number of its former artists—including Chuck D, Dave Mason of Traffic and Rick James (by way of a trust, as the guitarist is deceased)—regarding the distribution of royalties from digital downloads. The sum comes out to $11.5 million to be split among numerous parties, as well as an increase in the royalty percentage received by formers going forward. The plaintiffs alleged that Universal's labeling of digital music earnings as "sales" rather than "licenses" took money off the table for artists, according to The Hollywood Reporter.
The suit deals with the same issues of F.B.T. Productions v. Aftermath, a lawsuit revolving around Eminem songs that established that licenses were a better method of paying musicians in a new era where record labels are no longer responsible for shelling out for relatively expensive packaging, compared to the low costs of distributing digital music.
The $11.5 million will be split among a large number of recipients: The aforementioned plaintiffs—as well as Andres Titus (Black Sheep), Ron Tyson (The Temptations), Martha Davis (the Motels), Feliciano Tavares and the band Whitesnake—will all receive $200,000. More than $3 million will be used for attorneys' fees, and the rest will be split among nearly 7,500 music acts represented by Universal Music in the past and currently.
More importantly, in the long run, is the change in royalty rates that the settlement brings to performers on Universal. The rate will be boosted by 10 percent, meaning the previous royalty rate of 15 percent on digital music purchases will be bumped to 16.5 percent. Every little bit helps.
Sony and Warner Music have recently dealt with similar lawsuits and settled accordingly. Universal was one of the last major holdouts.