SiriusXM Faces SoundExchange Lawsuit Over Royalty Discrepancies

US-based satellite radio service, SiriusXM, has been thrust into the spotlight following a lawsuit initiated by performance rights organization, SoundExchange. The core of the dispute revolves around royalties purportedly owed to artists from satellite radio broadcasts. SiriusXM, in a recent statement, conveyed both surprise and disappointment at the lawsuit, staunchly defending its royalty calculation methodology as both rigorous and fair.

The Crux of the Lawsuit

SoundExchange’s lawsuit, filed in the US District Court for the Eastern District of Virginia, alleges that SiriusXM has been withholding more than $150 million in unpaid royalties over several years. The performance rights organization contends that SiriusXM has been manipulating its revenue calculations, reducing satellite radio service earnings while inflating streaming radio service revenues. This alleged manipulation directly impacts the royalties due to artists and copyright holders.

Regulatory Landscape

Currently, the US Copyright Royalty Board mandates a 15.5% royalty payment on gross revenue for satellite radio services. Streaming services, however, have a different rate structure. SiriusXM, operating under the statutory rights system, has emphasized its commitment to artists, highlighting its payment of over $5 billion in royalties to SoundExchange over the past decade.

Historical Tensions

This isn’t the inaugural conflict between SoundExchange and SiriusXM regarding royalty payments. A notable lawsuit from 2013, which was settled in 2018, saw SiriusXM paying $150 million to SoundExchange to address claims. SiriusXM remains the sole commercial satellite radio service provider in the US, having introduced a streaming version of its channels in 2017. Meanwhile, SoundExchange stands as the only performance rights organization designated by the US Congress to manage digital royalty payments, having collected over $1 billion in 2022 on behalf of approximately 600,000 artists.

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