Billboard reports today the government’s decision on the performance royalties SiriusXM pays to artists (effective January 1, 2018):
The Copyright Royalty Board [“CRB”] has determined that Satellite Audio Radio Services, i.e. SiriusXM will pay 15.5 percent of revenue for the next five years beginning in 2018 to 2022, although the full determination has yet to be posted on the CRB’s website while the participants scrutinize the document to make sure proprietary data is not publicly revealed.
That represents a nearly 41 percent jump from the 11 percent the service was paying in the current year, although it’s short of the 23 percent that SoundExchange was advocating to the CRB judges, who are appointed by the U.S. Librarian of Congress. But its better than the static rate that Sirius was hoping from the judges.
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 advocated on behalf of its artists and rights owners in this rate litigation, which spanned 24 months.
“We thank the CRB for its work and appreciate their consideration of the case we laid out,” SoundExchange President and CEO Michael Huppe said. “SoundExchange is dedicated to our mission of ensuring that creators are properly recognized and compensated for the use of their work. And while the Copyright Royalty Board did not adopt the rates we proposed for Sirius XM, its ruling demonstrates an important step in the right direction toward valuing the contributions of the music creators represented by SoundExchange.”
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.
Major score for artists, musicians, vocalists, as well as major and indie labels. More to come when the Copyright Royalty Board releases its written opinion.