It was only a couple of weeks ago that we were writing about the brave new future world of satellite-radio service SiriusXM’s next-generation platform. However, the company is now facing a legal issue with its current service, in the shape of a lawsuit from SoundExchange.
The company is suing “to recover substantial unpaid royalties and late fees owed under the Copyright Act for the use of sound recordings” on SiriusXM, claiming that the latter company “has wrongfully withheld more than $150 million in unpaid royalties over the past several years”.
This is all about how SiriusXM calculates the royalties it pays to SoundExchange, with the latter accusing the radio firm of “ascribing excessive and unjustified value to the webcasting component of its bundled packages and then removing that value from the satellite radio royalty pool” – among other “improper deductions”.
Why? “SiriusXM has always respected the rights of creators and artists, and over the past ten years has paid SoundExchange royalties of over $5 billion dollars. Today, royalty payments from SiriusXM represent over 80% the statutory royalties that SoundExchange distributes to record labels and performers,” added the company.
SiriusXM claims that this is simply a case of “ordinary course disputes – an audit matter and an allocation of revenue from bundled products” and maintains that it has been sticking to the regulations laid down by the US Copyright Royalty Board (CRB) over how to calculate and pay out royalties.
These kinds of tensions are hardly new for SiriusXM and SoundExchange. In 2018 the former agreed to pay the latter $150m to settle a pair of lawsuits that accused it of underpaying for performance royalties between 2007 and 2017.