New Satellite Royalty Rates Fail to Reflect Full Value of Music

From Broadcast Newsroom:

While Dramatically Increasing Royalty Rate for Music on Satellite Radio, Copyright Royalty Board Still Sets Rates Below True Value

WASHINGTON, Dec. 4 /PRNewswire-USNewswire/ -- SoundExchange today expressed mixed reaction to the royalty rates announced by the Copyright Royalty Board (CRB) to be paid by satellite radio operators, XM and Sirius, to the artists and record labels whose music is the core of the satellite radio business. The decision dramatically increased the royalty rate paid by XM and Sirius, thereby validating the overwhelming evidence presented by SoundExchange regarding the critical importance of music to satellite programming.

The CRB also rejected virtually all of the evidence submitted by XM and Sirius. However, the congressionally-mandated standards that the CRB followed ultimately led it to set rates at half the value it determined artists and record labels would have received in the marketplace. "This result once again highlights the inequity of a rate standard that forces creators of music to subsidize certain music services with below market rates," said John Simson, Executive Director, SoundExchange, a non-profit organization that collects and distributes royalties from various digital music services on behalf of artists and record labels. "We are glad that the decision affirmed the importance of music to XM and Sirius, but disappointed that the rate standard led to a lack of full and fair compensation because of the business circumstances created by XM and Sirius," added Simson.

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