SiriusXM will reportedly drop Clear Channel stations soon

Thursday, August 29, 2013 - 12:25pm

It looks as if the existence of Clear Channel programming in SiriusXM's channel lineup will be coming to an end soon.

CCE was an early XM Satellite Radio investor, and the satellite operator carried some Clear Channel station programming (like Top 40s KIIS/Los Angeles and Z100 WHTZ/New York, AC Lite WLTW/New York, Country WSIX/Nashville, and Urban WGCI/Chicago). But after Clear Channel announced during its Q2 conference call that the company had completely divested of any and all ownership in satellite radio company SiriusXM, it was revealed that the CC channels would soon disappear, according to Tom Taylor Now.

Originally slated to get the axe by the end of this month, "there’s speculation that there’s a reprieve until sometime in October. One theory about the extra time is that Clear Channel had commitments to advertisers that needed to be fulfilled," Taylor wrote today.

Read more in Tom Taylor Now here.

SoundExchange wants "$50 to $100 million or more" from SiriusXM for back royalties

Tuesday, August 27, 2013 - 12:55pm

SoundExchange, the record industry body that administers sound recording performance royalties for digital (Internet, satellite, and cable) radio, has filed suit against SiriusXM for what it calls "a massive underpayment" for the period between 2007 and 2012.

According to SoundExchange, SiriusXM "took a number of impermissible deductions and exemptions in calculating its royalty payments... including deducting for pre-1972 sound recordings and certain channel packages containing music."

Federal law didn't protect sound recording copyrights until 1972 (older recordings are protected by state laws). As The Wall Street Journal explains, "Because of that, Sirius has never paid to use these songs, even though such oldies account for an estimated 10% to 15% of the satellite-radio company's total airplay, according to SoundExchange Inc. Sirius sets aside the revenue generated by these pre-1972 spins before it calculates the royalties it owes rights holders."

Last year the federal government (Copyright Royalty Board) set new statutory licensing terms for SiriusXM to cover a five-year period. According to that decision, the satellite broadcaster is to pay 9% of gross revenue this year, rising to 11% by 2017. Read more here.

Part of that settlement was an amendment that explicitly allows SiriusXM to cut its SoundExchange payment by subtracting the share of revenue from pre-1972 recordings from gross-revenue. This allowance for older recordings was not explicitly part of the licensing terms for the 2007-2012 period, however. The Journal reports that SoundExchange plans to present the new regulation (which it's appealing) as "evidence that such an exclusion didn't exist before."

The suit was filed yesterday in U.S. District Court for the District of Columbia. SoundExchange says it is seeking to recover "$50 to $100 million or more." We haven't yet seen a public comment from SiriusXM on the matter.

Read more in The Wall Street Journal here.

Agogo app creates customized audio stream, including music, from online sources

Friday, August 9, 2013 - 1:00pm

A new online audio "aggregation" service called Agogo is designed to collect music and spoken word content to generate a custom feed, and specially for use in the car.

Agogo launched Wednesday via its free app for Apple mobile devices, CNet reports. With it, a listener can connect to a Spotify or Rdio account for music, and "interconnect" with NPR content, local traffic reports (from Clear Channel), text-to-speech news articles, book excerpts (from Simon & Scuster), and even audio from online television programming. A Stitcher of sorts, but with music content.

Founder J.D. Heilprin told CNet, "Awesome audio programming is bountiful, but today it is trapped inside content silos and spread across apps. We built Agogo to radically improve the audio experience for people on the go."

Read more in CNet here.

Pew Research writes "Digital Drives Listener Experience" for radio

Tuesday, March 19, 2013 - 1:00pm

As "technology is turning what we once thought of as radio into something broader -- listening" (as Pew wrote in 2006), online-only and satellite radio (while still a small share of overall radio revenue) have the more positive financial forecasts for the long-term.

That's from an overview essay of the "audio" section of the Pew Research Center's Project for Excellence in Journalism new annual report on the state of the news media. The essay is called "Audio: Digital Drives Listener Experience." (While the study focuses mostly on news content, it certainly isn't limited to that, discussing Pandora, Spotify, and the Intenret radio Fairness Act, among other topics.)

Pew also concluded that NPR "may have positioned itself for the digital age better than other news radio." On-air listening declines as NPR may very well be partially the result of robust digital offerings on the web, podcasts, and mobile apps.

One digital platform that's failing is HD Radio. Now, more stations are actually dropping their HD signal than are adopting the technology, and there are fewer HD signals on the air than a year ago.

See more of the Pew study here. There are more charts from the paper here.

SiriusXM direct licensing deals may make it harder for SoundEx to claim CRB is "below market"

Tuesday, December 18, 2012 - 1:30pm

During testimony in the recent royalty determinations (see yesterday's RAIN here), SiriusXM reportedly revealed it has secured "direct content licenses" with more than 60 labels, giving them even broader use rights at rates below those set by the Copyright Royalty Board.

Digital Music News reports SiriusXM will pay 5%-7% of its gross revenues for these licenses, covering more than 7,000 artists, 9,000 albums, and 110,000 songs (there were no reported details of how specifically the use of the licensed music is broader than is allowed by the statutory license).

These agreements are actual, real-world settlements between active players in the music rights market. As such, these deals (both the rates and expanded allowable uses of the music) will likely be cited in arguments against music industry interests who claim the CRB-determined rates for satellite radio (and webcasting, for that matter) are "below market value." It isn't clear whether the more favorable terms of these direct deals tempered the CRB's decision

As we reported yesterday, the CRB set sound recording royalties for satellite radio at 9% of gross revenue in 2013, increasing 0.5% each year (to 11% in 2017). Billboard estimates SiriusXM will pay between $1.02 billion and $1.22 billion in statutory royalties to SoundExchange from 2013 to 2017.

Hypebot reports SoundExchange pressed the CRB for satellite radio royalties that increased to 20% of gross revenue by 2017 (DMN says "one resident expert" pushed for 30%), calling the CRB rates "below market."

Last month industry attorney David Oxenford reported that much of the discussion in the rate-setting's oral arguments phase "focused on the value of music in a marketplace -– essentially the 'willing buyer, willing seller' question." Currently, the law mandates that the rate-setting for royalties for these media is to be governed by the "801(b)" standard (which the record industry has argued does not reflect fair market value) (RAIN coverage here).

In March Sirius XM filed a lawsuit against SoundExchange and the American Association of Independent Music (A2IM), accusing the record industry organziations of interfering with its efforts to directly license sound recordings. The complaint accuses SoundExchange and A2IM of being in violation of federal antitrust law, and New York state law (RAIN coverage here).

Digital Music News coverage is here. Read Hypebot here. Read Billboard coverage here.

As a percentage of revenue, new satellite and cable radio royalties still wildly below webcast rates

Monday, December 17, 2012 - 12:40pm

Sound recording royalties for satellite radio service SiriusXM will rise from 8% of gross revenue to 9% in 2013, and continue to grow 0.5% each year (to 11% in 2017). The Copyright Royalty Board also set the new statutory rates for cable television music services. Those rates will rise from 8% of gross revenue now to 8.5% for 2014 through 2017.

The CRB announced its determinations late Friday.

This royalty is only for copyright sound recordings (i.e. not compositions), and only for satellite transmissions or cable TV (not webcasting). Most webcasters (including satellite radio and cable television radio when they stream online) pay royalties on sound recordings at a "per-performance" rate. For even the most successful webcasters, this royalty can amount to more than 50% of a company's gross revenue.

Read the brief CRB announcement of rates here.

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