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"You’re not buying music" – Supreme Court

John Moe Mar 28, 2011

Alright fine, that’s a bit of an extrapolation. But last week the Supreme Court declined to hear a case involving royalties paid to musicians for downloads. That refusal essentially confirmed a lower court ruling that music downloads from sites like iTunes are not sales but rather licenses. The going royalty rate for a music sale is 12% whereas it’s 50% for a license. The court had found that with all the stipulations attached to a user agreement, heck the existence of a user agreement, this was not a sale. It could mean a lot of money for artists who signed their deals before digital music became a big deal, so a lot of older artists. “This is life-changing,” said Joyce Moore, the wife of Sam Moore of Sam & Dave, the duo that had hits in the 1960s like “Soul Man.” “If we were being paid a nickel a download, as opposed to 35 cents — that’s a huge amount of money for a guy that is on a fixed income or has to run up and down the road at 75 years old.”

Newer artists are more likely to have been signed to deals that specify specific rates for CD sales vs. digital sales.

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