Sirius XM’s label royalties rise, but not as high as record industry hoped

By | Published on Monday 17 December 2012

Sirius XM

Sirius XM will be paying more of its revenues to the record companies in the coming years following a ruling by the US Copyright Royalty Board last week.

As much previously reported, while FM and AM radio stations in the States do not currently pay any royalties to record companies and recording artists (they only pay music publishers and songwriters), satellite and internet radio services do need to pay a royalty, and these are set by the Copyright Royalty Board and paid via collecting organisation SoundExchange.

Satellite broadcaster Sirius XM currently pays 8% of its revenues to the record companies, though next year that will rise to 9%, with further rises in the coming years, so by 2017 it is paying 11%.

Despite the rises, SoundExchange had been pushing for significantly higher rates (12% next year, with a rise to 20% by 2017), so relatively speaking Sirius XM got off lightly, resulting in a 7% uplift in the broadcasting company’s share price.

As previously reported, internet radio operators, led by Pandora and Clear Channel Radio’s iHeartRadio, are pushing for net-based radio services to have CRB-set royalties calculated more in line with satellite services. The digital firms argue that the current online radio royalties system proves much more expensive, putting online operators at a massive disadvantage to satellite broadcasters, not to mention terrestrial radio firms who are paying nothing to the labels.