UMG Will Pay Out $11.5 Million Over Classification of Digital Downloads

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Universal Music Group is finally settling a class action lawsuit over the way digital singles are classified. This classification has become an ongoing debate. UMG was paying artists based on traditional sale rates, but artists argue that the downloads should be classified as licences.

This particular lawsuit was brought about by the estate of Rick James, Chuck D of Public Enemy, and others against UMG Recording and Capitol Records.

The terms of the lawsuit still have to be approved by the court, but this is the agreement so far:

UMG will pay up to $11.5 million to pay class members for past digital downloads, they’ll cover attorney fees and costs, and going forward they’ll increase class members’ download royalties by 10 percent.

The details and information on how to submit a claim will be available online. There’s nothing on the website yet, as UMG didn’t bother putting any information up before sending out the link in a press release.

 

Photo by Bart on Flickr used with the Creative Commons License

6 Responses

  1. Arthur Owens

    I think you meant to write the “…terms of the settlement still have to be approved by the court,” rather than the “…terms of the lawsuit still have be approved by the court.” Minor oversight, and usually court approval for such settlements is fairly pro forma.

    Reply
  2. Musicservices4less

    All lawsuits even class action lawsuits are basically a crap shoot and can go either way and even sideways. This one for many reasons turned out to be horrible not only for the artists involved but for the state of the industry going forward. The really bad part is the ongoing royalty calculation and its absolutely ridiculous settlement of “increasing future payments on Downloads/Mastertones by approximately 10%, and without any cap.” Anybody worth their salt in this business knows that is a huge win for the majors and a really screwing for these artists.

    Wow, UNI and Capitol really gave up alot in payments too. A gigantic $11.5 million. Oh my, I think the executives at UNI and Capitol won’t be able to buy lunches and dinners for about 2 months because that’s all it is equivalent to.

    Just goes to show that even when artists/producers attempt to band together it is kind of fruitless against an industry controlled by major corporation that is hold all the cards.

    Stay independent, so you can hold all the cards in your career.

    Reply
  3. Rickoshay

    That’s great, but when are artists going to see the trickle-down from all the dot bomb era lawsuits that were won or licensing advances?

    Reply
  4. FarePlay

    Can a class actions suit by artists who feel unfairly treated by their labels be too far off? The equity deals signed by the labels with streaming companies may very well be their undoing.

    Reply

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