 CRB sets royalty rate for satellite radio: 6% of revenues now, rising to 8% ·Dec 5, 06:08 AM The Associated Press reports today that “XM Satellite Radio [and Sirius Satellite Radio] will pay a performance license rate of 6 percent of certain revenue this year for sound recordings played over its network, according to a Copyright Royalty Board decision.” The decision sets the rates for the next six years (2007-2012). Under the terms of the new deal, the companies will pay a performance license rate of 6% of specific gross revenues that are subject to fees for 2007 and 2008, 6.5% for 2009, 7% for 2010, 7.5% for 2011 and 8% for 2012. The money subject to royalty fees includes revenue from both XM subscribers and advertisers from channels other than those that use only incidental performances of music. SoundExchange respondsAccording to a SoundExchange press release, “In its decision, the CRB said that the value of music to the satellite services should start at a benchmark of 13 percent of total subscriber revenue. However, due to a federal law requiring that any new royalty rate avoid creating an overly ‘disruptive’ impact on the satellite services, the CRB reduced the royalty from the benchmark 13 percent to six percent in the first two years of the term, with a gradual increase to 8 percent in 2012.“During the proceedings, SoundExchange argued for rates starting at eight percent, while the satellite services argued for a royalty rate of approximately one percent.” Michael Huppe, General Counsel of SoundExchange, is quoted in the release as saying “While not agreeing to our rates, the CRB fully recognized that music is not free. It has value, and the people who invest in and create music deserve to be paid… Though the final rate is below the actual value that music provides to these services, it nonetheless represents a significant increase over the royalties previously paid by satellite radio. As a result of this decision, recording artists and record labels are finally on the right track towards fair compensation.” Within analyst expectationsSirius Chief Financial Officer David Frear on Tuesday declined to comment to the AP on whether the company would challenge the decision, “as lawyers are still reading through the decision. He echoed [XM’s] Parsons’ comments that the new rates generally fall within the expectations of Wall Street analysts, which were about 7 percent to 10 percent of revenue.”As was the case with the Internet radio royalty decision, the parties to the case have 15 days from the Copyright Royalty Board’s Monday decision to move for a rehearing, and 30 days from final publication to appeal the decision to the U.S. Court of Appeals for the District of Columbia. The AP story can be found here. SoundExchange’s press release is reproduced here. share: del.icio.us.  Reddit  Digg  Yahoo  Wink  Windows  Google  Newsvine 
CommentCommenting is closed for this article.  Other blog entries Spotify is an "online music service," but that doesn't make it "radio" How Pandora could become a $70 stock (in a few years) Late-night addendum to the Pandora analysis: "Enterprise value" Memorial Day cliche' Zune's failure proves the way onto devices, for radio, is apps Great Moments in Business Journalism VXIII -- Pandora version Great Moments in Business Journalism XVII NAB is negotiating a VERY FAIR deal with musicFIRST Simulcasts aren't working Book your TUESDAY travel to Washington, DC! |
You know, if it weren’t for the radio stations that play their music, these musicians and record companies would have a very difficult time selling any of their music in the first place. Therefore, it would only seem fair for the radio stations to participate in the profits of the record companies. Am I out of line here or does this actually make sense?
— Larry Andrews · Jan 4, 01:26 PM · #