Eminem’s publishing companies filed suit last week to stop the sale of ringtones they say are pirated from the hip-hop star’s hit tunes.
Michigan-based publishers Eight Mile Style and Martin Affiliated filed documents in U.S. District Court in Detroit against five third-party content providers that sell music clips from Web sites. The lawsuit accuses Cellus USA Inc., FanMobile, MatrixM L.L.C., MyphoneFiles and Nextones.com of “the blatant and unauthorized use” of ringtones from chart-toppers “The Real Slim Shady,” “My Name Is,” “Without Me” and other tunes without approval from Eight Mile Style.
Cellus, which was acquired last year by Airborne Entertainment for an undisclosed sum, is a Colorado-based company that sells content through www.mobilecraze.com and other sites. Bruce Ellis, the company’s chief executive officer, said he was “very surprised” by the lawsuit.
“Cellus certainly does everything it can to have the proper licenses,” said Ellis, who said he had not yet seen the filing and therefore couldn’t discuss specifics. “We never put anything up knowingly that doesn’t have the right license.”
But industry insiders say the lawsuit underscores a growing concern in the booming direct-to-consumer content industry: the increasing number of third-party providers hawking ringtones, images and other proprietary content without obtaining legal rights.
“There’s quite a bit of that going on out there,” said Ted Suh, chief marketing officer for wireless entertainment publisher 9 Squared Inc. “Most of the time it’s for major hit songs.”
Of course, unlicensed wireless content isn’t limited to music clips. Images of celebrities and popular brands often are pirated by mobile publishers, insiders say. And unscrupulous publishers are sure to exploit new platforms of wireless content including video and full-track downloads as new technologies come to market.
“We’re seeing, as far as pirate sites are concerned, a lot of other sites,” John Scrofano of 3Gupload.com said earlier this year. “We’re seeing a lot of that creep up.”
Licensing issues have long plagued ringtone providers. Some labels and artists wary of the new medium have been slow to grant rights for mobile music clips, and many hip-hop tunes feature an assortment of artists and labels, further complicating matters.
In fact, knowing which artists have licensed their works for mobile may be the only way to discern pirated content. For most wireless users, there’s no way to differentiate licensed content from pirated material. For instance, content providers who offer polyphonic ringtones from the Red Hot Chili Peppers, who reportedly have not granted such rights to any mobile publisher, must be selling the clips without a license, said Suh.
Ironically, Eminem-whose real name is Marshall Mathers-was one of the slower artists to embrace wireless, Suh said. It wasn’t until a few months ago that the rapper began licensing his wares for mobile use.
“It took me two years to get a deal with Eminem,” said Suh. “I knew Eminem was upset about (pirated mobile music). I’m psyched that he actually did something. It kind of levels the playing field” for wireless publishers who obtain proper rights.
Much of the pirated music on the wireless market is in the form of monophonic or polyphonic ringtones, which content publishers typically create themselves. The birth of “real tones”-actual clips from full-length songs-has seen an increase in “covers,” whereby outside artists play a version of a hit tune for mobile use.
But licenses are required for publishers selling either cover tunes or polyphonic re-creations of songs. And carriers usually protect themselves by including indemnity clauses in their contracts with third-party providers.
While Eminem’s lawsuit isn’t the first in the mobile music licensing space, it is unquestionably the most noteworthy to date. And Suh said artists and music labels will be watching carefully.
“I bet you’re going to see a ton of publishers right now getting fired up to see the outcome of this case,” Suh predicted. “It could be setting a precedent.”
