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Slacker asks for $10 million judgement in SoundExchange dispute to be set aside

By | Published on Thursday 27 October 2022

Slacker Radio

US personalised radio service Slacker and its parent company LiveOne have asked a court to set aside a recent judgement ordering them to pay $10 million to American collecting society SoundExchange. They reckon the judge should order the two parties to restart settlement negotiations instead. SoundExchange, unsurprisingly, does not agree.

Personalised radio services in the US – like Slacker, which was bought by the company now known as LiveOne in 2017 – can rely on a so called compulsory licence when it comes to recordings, meaning they don’t have to negotiate deals with individual record labels. SoundExchange manages that compulsory licence.

The society says that Slacker stopped paying the royalties due under the licence back in 2017 following the LiveOne acquisition. After years of dispute and negotiations, it went legal in June this year.

And it scored a quick win in that litigation. Earlier this month a judge ordered Slacker and LiveOne to pay SoundExchange $9.7 million in unpaid royalties, while also saying that the company could no longer rely on that useful compulsory licence.

According to Billboard, it turns out that – once the dispute was in court – SoundExchange presented an agreement that had been signed by execs at Slacker back in 2020 which said that a judge should enter a judgment against the company for the full sum owing to the collecting society if the digital firm defaulted on a repayment plan that had just been agreed. Which it did.

However, LiveOne argues that it’s unrealistic for it to hand over nearly $10 million to SoundExchange in one go, and that new talks should begin to agree a payment plan. This month’s judgement, it adds, will cause “unsustainable economic damage” to the LiveOne business, not least because it has had a negative impact on the company’s loan agreements.

But SoundExchange insists that the judgement should stay in place, basically arguing that – after five years of back and forth with LiveOne – now is not the time to be opening a new set of negotiations.

Legal reps for the society argue that this month’s judgement was necessary to “protect performing artists”, and that “the court should deny defendants’ latest attempt to shirk their obligations with the promise that next time will be different”.