Copyright Royalty Board Increases Sirius XM Royalty Rate
Judges announce royalty rates and terms for Satellite Audio Radio Services (SDARS) and preexisting subscription services
The Copyright Royalty Board (CRB) issued a decision on the determination of the royalty rate case between music creators and Sirius XM's satellite radio service, as well as for the cable and satellite television music services provided by Music Choice and Muzak, for the years 2018-2022.
The CRB increased the rates for Sirius XM by more than 40%, from 11% of revenue to 15.5% of revenue, effective January 1, 2018. Sirius XM is the only satellite radio service in the United States and reported revenues of $5 billion in 2016. By contrast, the CRB reduced the rates for Music Choice's and Muzak's services from 8.5% to 7.5% of revenue.
SoundExchange President and CEO Michael Huppe Statement
"Yesterday's decision confirms the need to change the so-called Section 801(b) rate standards under which satellite radio and the 'grandfathered' cable radio services operate, and which permit the CRB to adopt rates different than what the market would provide. As a result of that rate standard, Sirius XM has paid below-market rates for years, and the recording artists and rights owners SoundExchange represents have subsidized the company's growth. Likewise, Music Choice and Muzak pay significantly lower rates than their non-grandfathered competitors offering the same service. SoundExchange urges Congress to establish rate standard parity so all digital services are subject to a 'willing buyer/willing seller' standard."
RIAA Chairman & CEO Cary Sherman Statement
"For more than a decade, SiriusXM pocketed billions of dollars on the backs of music creators by paying below-market rates while the company crowed about record profits and boasted a market cap about the size of the entire recorded music market. At the same time, SiriusXM continues to go out of its way to file lawsuits to deny fair compensation to legacy pre-1972 artists who depend on that income for their living. That's no record to be proud of."