US satellite broadcaster Sirius XM has responded to a lawsuit filed against it by American collecting society SoundExchange.
According to Billboard, Sirius says that SoundExchange's claim that the broadcaster has underpaid royalties to the tune of $150 million is based on a “flawed and biased examination” of its operations.
Satellite and online broadcasters in the US can rely on a compulsory licence when it comes to recorded music, meaning they can make use of any recordings at royalty rates set by the good old Copyright Royalty Board. SoundExchange administrates the compulsory licence, collecting the money that is due on behalf of artists and labels.
There are different licences for satellite and online broadcasts, the former based on a revenue share system and the latter on a per-play payment system. Sirius offers both satellite and online services, and has a subscription package that includes both.
That's where the dispute with SoundExchange comes from. With that package, Sirius needs to allocate a portion of each subscription payment to the satellite service and a portion to the online service, with its revenue share commitment only applying to the former.
The collecting society disagrees with the way the broadcaster is making that allocation, arguing that Sirius is employing a system that "ignores its actual business practice" and "relies on patently unreasonable surveys". SoundExchange's lawsuit concluded that the current allocation system is "Sirius's cynical attempt to avoid paying the royalties it plainly owes”.
In its response, Sirius argues that a “proper audit” would conclude that it “properly calculated its royalty payments to SoundExchange".
It also accuses the collecting society of “misguided allegations”, adding that the rights body seeks to “justify its existence, lofty executive salaries and luxurious operating style through repeated litigation against its biggest contributor".
As well as disputing SoundExchange's claims, Sirius also wants the legal battle to be moved to a court in New York or Washington DC, arguing that the lawsuit has been filed in Virginia because cases there are more likely to be fast-tracked, resulting in less time for discovery.
Steve Knopper