When Michael McDonald was a member of the Doobie Brothers, a typical artist’s agreement with a major music company would offer up to 20% royalty on sales and up to 50% on licenses of the music, say as a theme for a TV commercial. These agreements did not anticipate iTunes nor music downloads.
Since the agreements between the music companies and Apple were deemed to be licenses, artists claimed and won the right to have downloads treated as licenses. Eminem led the parade of artists to win large back-pay settlements (he had an interest in Slim Shady).
Now McDonald, too, has reached a settlement with Warner Music over his royalties on downloads. It didn’t hurt that the artist hired Eminem’s lawyer to pursue the litigation. Details are sparse, as the music companies are “keen to keep these lawsuits out of the courts” and away from the public eye.
According to licenses found in ktMINE, modern agreements between artists and music companies define “electronic transmission” extensively, including future developments, and consider such transmissions as sales.