Major music labels and their trade group, the Recording Industry Association of America, scored a major victory over LimeWire last year, shutting down the P2P service.  The results were noticeable -- an immediate dip in filesharing traffic.  Though perhaps the thrill of that victory will be temporary for the RIAA, they can console themselves with a record settlement of $105M USD that a jury awarded them last week after lengthy negotiations.

Filesharing-centric blog TorrentFreak ran one of the first stories on the settlement and quoted RIAA spokesman Jonathan Lamy as stating, "Any funds recouped are re-invested into our ongoing education and anti-piracy programs."

This might lead one to believe the music artists would get none of the settlement.

After a dialogue with Mr. Lamy we realize this may not necessarily be the case.  First, Mr. Lamy's comment was delivered years ago, when the suit was just warming up.  Second, his comments may have referred to only the RIAA's share of the settlement -- remember the music labels were co-plaintiffs in the case.

"Far too much credence was given to a TorrentFreak 'report.' The quote attributed to me was something I said years ago in reference to the end-user litigation program, which did not generate any revenue for the record companies." complains Mr. Lamy. "The RIAA has made no comment [at the time of the settlement] on how the recoveries in the LimeWire case would be distributed. That is a decision for the individual plaintiffs. However, the record companies have historically shared large litigation recoveries such as the KaZaa settlement with their artists.”

Ultimately, TorrentFreak's conclusion -- though not as well sourced as it appeared -- may still prove semi-accurate.

The New York Times ran a piece on the settlement in their Media Decoder blog.  They quote Warner Music Group as commenting, "We will share the settlement money with our artists."

Similar promises were made with lawsuit settlements with other P2P giants, including Napster, Kazaa, and Grokster.  And money was indeed set aside.

But according to many major musicians the money was largely never distributed to artists.  Bob Donnelly, a longtime lawyer for artists is quoted by NYT as stating, "I don't remember any of my artists’ accountants ever saying, 'Hey, guess what, we got a great bonus this month.'"

Another question that even if some of the money is eventually set aside and distributed, how it will be divvied out.  A major record label can have thousands of artists on the main label and hundreds of imprints.  Some say that only the biggest artists will stand a decent chance at collecting a piece of the record loot.

Dina LaPolt, a lawyer for Steven Tyler, the estate of late 90s rap icon Tupac Shakur, and others is quoted as adding, "It’s going to be the artists that make noise. They are the ones that are going to get paid."

At the end of the day the settlement provides few answers to the big questions and challenges facing the music industry.  And if history is any indication RIAA and labels will likely pocket a large chunk the settlement; and the money they do choose share will go only towards a privileged handful of established artists.  But, for what it's worth, the RIAA wanted to set the record straight -- they never said that musicians would get nothing.