- Class action lawsuit accuses SiriusXM of misleading consumers by adding a ‘US Music Royalty’ fee on top of its advertised music subscription prices at check out
- Fee increases cost of music plans by 21.4%
- No other music services “charge any separate royalty fee over and above their advertised music plan prices”, says the lawsuit
SiriusXM has been sued over its ‘US Music Royalty’ fee - an extra cost added on top of the advertised price of its music plans which covers what the US satellite radio company pays the music industry. The fee increases the price of any Sirius satellite radio subscription in the US that includes access to a music service by 21.4% at check out.
A class action lawsuit filed in Washington state declares that “reasonable consumers” would expect that the advertised price for SiriusXM’s music plans would include the “fundamental costs” to access music content. No other music services, it adds, “charge any separate royalty fee over and above their advertised music plan prices”.
According to the lawsuit, Sirius advertises its various satellite radio subscription plans before the 21.4% fee is applied, with the phrase “plus fees and taxes” included, usually in a smaller typeface. On the Sirius Platinum plan, which is $23.99 a month, the music royalty fee adds $5.13 to the bill. Across the Sirius subscriber base - around 33.9 million subscribers according to the lawsuit - those additional fees generate massive revenues.
The lawsuit claims that, in 2023, the total music royalty fees collected by Sirius topped $1.36 billion which, it adds, exceeded the entire company’s net profits of $1.26 billion. Of course, the music royalty fees are used to cover payments Sirius makes to the music industry, but that's still a lot of money from a hidden cost to the customer.
In the US it is more common for sales taxes to not be included in the advertised subscription price of digital services, because what taxes apply varies around the country, so these are often added on top. Therefore customers may well assume that “plus fees and taxes” mainly relates to sales taxes. However, the lawsuit claims, the additional fees Sirius charges are mainly - or in Washington state entirely - the music royalty fee.
That fee has been made up by Sirius, the subscribers behind the lawsuit claim. They are keen to stress that they do not oppose artists, songwriters, record labels and music publishers getting paid when music is played on Sirius services. However, they say, paying for music when you run a music service is a core business expense and shouldn’t be presented as some kind of added extra.
They also accuse Sirius of presenting the music royalty fee as if it’s some kind of government mandated charge, so that it can be bundled under the ambiguous ‘fees and taxes’ category.
In an FAQ on the Sirius website explaining what the US Music Royalty Fee is all about, the company states that “music royalty rights were established by Congress and are the product of the Copyright Act”. It then explains how, under US copyright law, satellite radio services are obliged to pay royalties to artists and labels, as well as songwriters and publishers, whereas AM/FM radio only has to pay songwriters and publishers.
That is all correct information. However, the litigious subscribers argue, any company using copyright protected works have obligations under copyright law and - while Sirius’s obligations may be different to those of its AM/FM rivals in the radio sector - that doesn’t justify making the royalties you are obliged to pay to the music industry some kind of extra mysterious fee.
The lawsuit wants an injunction forcing Sirius to advertise its subscription prices with the music royalty fee included, plus damages for those subscribers who signed up without that clarity. Damages would be decided in court, the lawsuit says, but should exceed $5 million.
Although filed with the court in Washington state, the named Sirius subscribers come from both Washington and Florida. They seek class action status, so that any victory in court would benefit all Sirius subscribers in those two states. A similar lawsuit has just been filed in Oregon, while another similar case was filed with the courts in New York last year.
