SiriusXM, SoundExchange make opening offers for 2013-2017 royalty rates

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Issue Date: 
Sep 14 2012 - 12:55pm

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Stock and financial analysis site Seeking Alpha is reporting that, for its upcoming royalty renewal, satellite radio outlet SiriusXM is offering to pay 5%-7% of its gross revenues to use copyright sound recordings, while SoundExchange is asking for 13% -- rising to 20% -- over the 2013-2017 term.

The Copyright Royalty Board set satellite's 2007 royalty rate at 6% of gross revenues, rising each year to 8% this year. 

Note that the CRB's determination (a) concerns SiriusXM's satellite transmissions, not its streams, for which it pays a separate royalty at a dramatically higher rate; and (b) this rate, in stark contrast to online streaming rates, is determined using the 801(b)(1) standard.

"With the survival of (SiriusXM) no longer at stake (as it was during the last determination) and lower capital expenditures required during the next license period, future rates that could be set by the CRB could easily be higher and much closer to, or even above, the 13% rate," predicts Seeking Alpha. Read more here.

While we're on the topic, Internet radio royalty determinations are currently based not on 801(b)(1) standards, but solely on the controversial, DMCA-mandated "willing buyer willing seller standard," which many industry experts agree is the key reason streaming royalties are so much higher than those for satellite and cable radio in the U.S. Congressman Jason Chaffetz in July announced he hopes to introduce to Congress the Internet Radio Fairness Act that would move Internet radio royalty determinations to use the 801(b)(1) standard that's used for most other royalty decisions (see coverage here). Industry legal expert David Oxenford explains the importance of 801(b)(1) here. Oxenford, a D.C.-base partner at Wilkinson, Barker, Knauer will moderate the "Music Licensing Roundtable" panel at RAIN Summit Dallas on Tuesday.


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