UPDATED: The Copyright Royalty Board (CRB) has set new statutory royalty rates for satellite radio that will see the percentage of gross revenue paid to artists and labels increase gradually from the current 8% to 11% by 2017. SoundExchange, which collects the royalties had wanted Sirius XM to pay up to 20% by 2017.
The Judges determined that the appropriate Section 114(f)(1) rates for Preexisting Satellite Digital Audio Radio Services for 2013-2017 are 9% of Gross Revenues for 2013, 9.5% for 2014, 10.0% for 2015, 10.5% for 2016 and 11.0% for 2017.
Sirius XM has shown increasing subscriber and financial strength in recent months, and is using their new found clout to try to cut more direct deals with music rights holders for lower rates
The CRB also set new statutory rates for cable TV music services like Music Choice. They are currently at 8% of Gross Revenues will rise to 8.5% for 2014 through 2017.
UPDATE: SoundExchange had asked for a higher royalty rate of 20% of earnings. They responded today with this official statement:
"We are encouraged that the Copyright Royalty Board (CRB) has increased the rates to be paid by SiriusXM for the contributions of recording artists and record labels to the success of its service. Specifically, the initial determination sets rates at 9 percent in the first year, rising to 11 percent in the final year.
While we support the upward trend that this case demonstrates, the rates for the next term represent a below-market outcome. This is due in no small part to the CRB’s application of a special rate standard that permits below market rates for SiriusXM. We believe that all radio services should pay a fair market rate for their use of sound recordings.
We will continue to fight for the value of music and protect the rights of creators. Meanwhile, we are reviewing the lengthy opinion in greater detail, and have no comment on our plans moving forward at this time."