The Copyright Royalty Board (CRB) has issued its decision on the determination of future royalty rates for Sirius XM’s satellite radio service in the US, as well as for the cable and satellite television music services provided by Music Choice and Muzak, from 2018 through 2022.
In a decision handed down last Wednesday (December 13), CRB increased the rates Sirius XM must pay rights-holders 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 (pictured) 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.”
SoundExchange argues that the 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 an open market would provide.
“There’s no reason recording artists and record labels should subsidize a company as profitable as Sirius XM,” Huppe said.
“Everyone should play by the same rules, and it is long past time for Congress to change the standard that currently forces music creators to subsidize flourishing companies whose success is built on top of the music.”Music Business Worldwide