The distinction is hardly academic. Under most recording contracts, artists are entitled to 50% of revenue from licensed uses of their music. That usually means soundtracks for movies, TV shows and ads. Sales, on the other hand generate royalties for the artist at a much lower rate—generally in the low teens, and rarely more than 20%.
But in reviewing a decision in a suit brought against Universal Music Group by producers affiliated with rapper Eminem, the Ninth Circuit held that iTunes downloads (even the DRM-free variety) are encumbered by enough restrictions that they can’t be considered sales at all.
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