SiriusXM To Pay A Higher Royalty Next Year - Music 3.0 Music Industry Blog

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December 22, 2017

SiriusXM To Pay A Higher Royalty Next Year

SiriusXM paying moreIn a move that will mean more money in the pockets of artists, the Copyright Royalty Board (CRB) recently ruled to raise the rates that the SiriusXM satellite service pays to copyright holders by 41%. The move raises the rate from 11% of revenue to 15.5% beginning on January 1st, 2018. The rate stays in place through 2022.

The ruling was a clear win for SoundExchange, which lobbied for a rate change for almost 2 years, although the CRB didn’t quite go as far as the collection service would have liked. The agency had lobbied for a 23% royalty rate. According to SoundExchange President and CEO Michael Huppe, “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.”

This wasn’t a total win for SoundExchange though, as the CRB actually reduced the rates for both the Music Choice and Muzak services from 8.5% to 7.5% of revenue. These service don’t bring in nearly as much money as SiriusXM though, which generated net income of $691.3 million on revenues of $4.02 billion for the first 9 months of the year

If you don’t know, SoundExchange is a not-for-profit agency created by Congress to collect and distribute royalties to artists and labels for music played by SiriusXM, Music Choice, and other programed digital music services.

Streaming networks like Spotify have a different set of standards that apply when determining royalty rates, which is why the the CRB’s SiriusXM decision doesn’t apply to them.

That being said, it’s a step in the right direction for copyright holders, and ultimately artists who have their music played on satellite radio. Let’s hope that these small victories continue in this direction.

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