AFTRA, AFL, SoundExchange react to SiriusXM's direct licensing plans

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Issue Date: 
Oct 28 2011 - 11:30am

From Issue:

Buzz surrounding SiriusXM's direct licensing efforts has heated up lately, with new statements from artist labor groups and SoundExchange.

In early August news broke that SiriusXM was seeking to license the sound recordings it plays directly from the copyright owners (record labels). Direct licenses would not only cut SoundExchange out, but copyright owners would not have the same legal obligation to share the royalty revenue with performers that's required under the "statutory" license created by the DMCA (RAIN coverage here).

SiriusXM

Thus, SiriusXM could reduce the fees they pay for music and the copyright owners, no longer obligated to share with performers, could keep more.

Two labor groups -- the American Federation of Television and Radio Artists (AFTRA) and the American Federation of Musicians (AFL) -- have come out against the move, calling it "blatantly anti-artist." SiriusXM is trying to "lower the rates for music," the groups state (here). The Recording Academy's president/CEO Neil Portnow also sent a letter to members encouraging independent labels not to directly license with SiriusXM.

AFTRA and AFL

SoundExchange also posted a message to its website. The non-profit royalty collection agency points out that Music Reports Inc. (MRI) -- the company SiriusXM is using to try to obtain direct licensing deals -- aims to obtain licenses "at the lowest possible cost." SoundExchange openly pushes in the other direction, the post states (here).

SiriusXM currently pays 7.5% of its revenues to SoundExchange for satellite radio performance royalties (it pays additional, different royalties for its Internet radio broadcasts, more here). In 2012 the rate increases to 8% of revenues. (By comparison, pureplay webcasters like Pandora pay the greater of 25% of total revenues or, in 2011, $0.00102 per listener, per song; more here). Such rates are set by the Copyright Royalty Board.

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Instead, this type of deal would undercut what artists get for satellite radio play currently. It would be nonsensical for artists to support this deal with XM. It is also apparent that you do not understand how SX works under federal law. They only collect royalties for statury licenses with radio-type services

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