from the it's-a-pile-on dept
In the last month and a half or so, it appears that everyone who holds a copyright on pre-1972 recordings has picked a new target: satellite radio giant Sirius-XM. You see, pretty much everyone has assumed for years (with good reason) that the statutory rates set by the Copyright Royalty Board for Sirius XM to pay SoundExchange naturally applied to all copyright-covered music. After all, once you can get past the ridiculous idea that three old judges get to decide how much satellite radio companies have to pay to play music, you'd at least think that the rules applied across the board.
Except, someone recently remembered those pre-1972 recordings. It started back in August, when lawyers for Flo & Eddie, of The Turtles, suddenly started demanding tremendous amounts of money from Sirius. That resulted in a "class action" lawsuit, seeking $100 million, being filed in California. But why stop with California when there are 49 other states? The same lawyers have followed the same basic lawsuit in other states as well. These, apparently, followed a tremendously obnoxious "PLEASE GOVERN YOURSELF ACCORDINGLY" letter.
Sensing an opportunity it was missing to suck up even more money, SoundExchange jumped into the fray with its own lawsuit. Now, SoundExchange is the organization which Sirius XM already pays all those statutory rate moneys to... and has for years... but it's arguing that Sirius XM has been trying to avoid paying even the statutory rates on pre-1972 recordings, and that it's done so for years, despite the CRB being clear that it does need to pay up.
Of course, this raises some interesting questions. If Sirius XM really has been not paying SoundExchange for pre-1972 recordings and hasn't licensed those recordings from the copyright holders directly, then, um, it might be in serious trouble. If that's the case, it sounds like an astounding strategic error on the part of Sirius XM. While it may have saved them from paying some amount of revenue to SoundExchange (estimated at 10 to 15%), opening themselves up to having to then license each of those works directly is a nightmare. At the very least, if Sirius XM had continued to pay SoundExchange's statutory rates, it would have some sort of argument against the class action lawsuits. However, if it turns out that the satellite broadcaster had tried to avoid paying anyone... that's probably not going to end well.
Sensing blood in the water (of course), all three of the major labels have now jumped in with their own lawsuit over this issue. Basically, it appears that Sirius XM is going to be fighting this battle against multiple players in multiple courts for a long time. Of course, you can bet a lot of this is just posturing over a different dispute. Sirius XM has been actively trying to route around SoundExchange (who it pays a tremendous amount to each year) and do direct licensing deals. In fact, Sirius XM sued SoundExchange for antitrust violations last year, claiming the organization was colluding to stop artists from opting-out of the SoundExchange deal and doing direct licensing deals with Sirius XM.
In other words... these are just the latest in a whole series of legal battles about how to split up the pie, with little regard to actually trying to make the pie bigger. Typical.