Sirius XM Passes RIAA Tax On To Consumers

from the but-of-course dept

Not quite sure how I missed this earlier (update: oops, turns out we didn’t miss it — so consider this an encore presentation), but Bret alerts us to the news that with the ever increasing royalty rates pushed by the RIAA in the form of its “spin-off” Sound Exchange, and codified by the Copyright Royalty Board (for whom I still do not understand how anyone can justify its existence), that Sirius XM has simply added a $2 RIAA tax to everyone’s monthly bills to help pay for the new performance royalties. Yup, because the RIAA and its members haven’t been able to come up with a business model that works, they get the courts to tax you for listening to your satellite radio (on top of what you already pay and what they already pay to songwriters and publishers) and that gets passed on to you. Just imagine what will happen if the RIAA gets its wish and gets to add a similar tax to terrestrial radio stations as well. If you thought radio was chock full of commercials before…

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Companies: riaa, sirius xm

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Comments on “Sirius XM Passes RIAA Tax On To Consumers”

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yozoo says:

Im a subscriber

If they raise my rate for this I will cancel, immediately. Not only because I don’t like the principle of the deal, I could live with that. Its not my company and I respect there responsibility to act in the interest of shareholders. However, in this case, I don’t even listen to music on my satellite radio (I have very eclectic music taste and use my MP3 player for that) . . . EVER (just Talk, News and OldTimeRadio)! So why should I have to pay royalties for listening to music I NEVER listened too. They will lose my business if they raise my rate one penny for this and that’s a promise!

yozoo says:

Re: Im a subscriber

Looks like this will work out for me actually. I can move down to the News and Talk ONLY subscription and save about 4 bucks a month and not have to pay the RIAA tax. I will lose my Old Time Radio (yeah it makes no sense to me either), but I guess I can deal with that (sorry advertisers on that chanel – I would listen if I could).

So nice move SERIUSXM guys, I am a slightly less happy customer from whom you will now recieve less money . . . if that was your plan, well done!

Kevin Stapp (profile) says:

Re: Im a subscriber

The ‘Music Royalty Fee’ on satellite radio sounds eerily similar to the ‘fees’ cellular companies tack on their rate plans. There have been numerous consumer complaints over the practice of advertising low rates plans then tacking on official sounding ‘fees’ to disguise the real cost of the services.

The ‘Music Royalty Fee’ is simply a business expense Sirius incurs as a part of its business. Adding this as some separate ‘fee’ rather than including it a part of the overall rate plan is misleading consumers. It is the same thing adding an ‘Audit Fee’ to cover the business cost of an outside audit of a business’ financial statements. It is a business expense like any other and the cost should be included in the base plan rate (or eaten by Sirus).

Joe says:

Re: Im a subscriber

I was a subscriber till yesterday; the day before they were going to charge me for 3 months more service with the increased rates. I am not blaming XM really, but to me it’s not worth 15 bucks a month for sat radio. I rather put that 15 bucks towards a phone data plan and get Slacker or some other streaming radio service for “free”.

I promise you are going to be paying that fee, all users will be paying that fee when they get their next bill.

Jon says:

Re: Im a subscriber

They already have raised it. I called to reactivate my service(today) and they told me it was approx. 15 bucks a month. I asked why the website says that it is only 12.95 a month and they said it was a “Music Royalty” of $1.90. I too never listened to the music channels so I inquired about the News, Talk and Entertainment package for only 9.99. She said that this package is not subject to the royalty. That’s great except for the fact that 2 of the only 4 channels that I listen to are not available for with that package. (Fox News and Raw Dog Comedy) I decided not to reactivate my service; it wasn’t worth it to me, let alone the fact that not a single person I spoke to had any sort of grasp on the English language.

Dark Helmet (profile) says:

Re: Re:

Here’s answers to a couple of questions raised:

“And why does Judge Wisniewski, allegedly a PhD. in Economics, support an arbitrary award system based on abstractly (and outrageously) valuated copyrights?”

Well, probably because His Honor was supported by an arbitrary award payment based on abstractly (and outrageously) overvalued copyright collections received by his industry benefactors.

“the Copyright Royalty Board (for whom I still do not understand how anyone can justify its existence)”

Uh, because they must exist to support the (con)artists. And the musicians. Oh, and puppies…they like puppies. And long walks on the beach. Let’s see, what else…Oh! The Jews! Their using the money to save the Jews from the Nazis. And they’re fighting terrorism. Oh oh oh, they’re also feeding the homeless. And the pandas. And their (cough cough) coke addictions (cough mumble grumble) ahem, and the CHILDREN!!! Won’t somebody think of those damn children, with their big doughy eyes and little midget hands?

Anonymous Coward says:



You lose the internets. Thanks for playing.

Stop shouting for a second a think this through – if this is in fact old news, any impact the news was going to have on the stock price would have already happened – the current stock price would already have this news factored in. Therefore, it would be silly to short a stock and then report a negative item knowing the news would have no material impact on the stock’s price. Mike is not a silly person, so you lose.

Anonymous Howard, Cowering says:


Two brief suggestions:
1) There is a key on most computer keyboards, located on the left, usually three rows up from the bottom, called something like CAPS LOCK, or CAPS, or LOCK, or it may just have a capital letter and a lock image on it. It’s a toggle, so if you hit it once, it changes state from or to locking the capital letters obtained by pressing the other keys. Polite discourse is more easily performed when the toggle is in the off, or lower case, mode. If there is not any lighted indicator of which mode is operating, typing a couple of letters will show you which one you’re using.
2) Reading the post will usually (although not always) improve the quality of your response. It’s not “report[ing] on Sirius,” it’s reporting on a new fee imposed as a result of the RIAA’s failed business model being propped up by massive campaign donations and lobbying efforts. Sirius XM just happens to be the conduit through which RIAA’s grubby hand reaches into unsuspecting consumers’ pockets.

I’m looking forward to your next post, as I’m certain that you will take this advice in the friendly and courteous manner in which it was intended.

Stuart says:


Wow. This isn’t really about whether they are good or not. That is a personal choice. This article was about the stupidity of the RIAA. I think if you learned to type without the caps lock constantly on, and learned to read and understand before just blurting out your gut reaction. You might just figure out that you need to SHUT UP. See how if not every letter in your post is caps that when you do use them they become effective.

Alan Gerow (profile) says:


Because he’s not reporting on general news. This is an analysis of the news website. It’s not a general, unbiased look at the news, but a look at news topics & how they relate to the ideas & ideals of a new economy.

There are no positives in this story as they relate to the new economy. It’s a look at the ramifications an earlier decision is having on a company in the marketplace.

If you’re looking for unbiased, up-to-the-minute fresh news, then you’ve simply come to the wrong place. If you’re looking for “insight into news stories about changes in government policy, technology and legal issues that affect companies ability to innovate and grow” … then tap your caps-lock key once, calm down, and keep reading.

Anonymous Coward says:

And so on... and so on... and so on....

And then the XM Sirius subscribers go online and download a few songs to make up for the two dollars they were charged (not matter of the money, more of principle), and piracy goes up, and the music industry has to charge more to XM Sirius to make up for it, then the subscribers go online and download a few songs to make up for the two dollars they were charged, and piracy goes up, and the music industry has to charge more to XM Sirius to make up for it, then the subscribers go online and download a few songs to make up for the two dollars they were charged, and piracy goes up, and the music industry has to charge more to XM Sirius to make up for it, then the subscribers go online and download a few songs to make up for the two dollars they were charged, and piracy goes up, and the music industry has to charge more to XM Sirius to make up for it, then the subscribers go online and download a few songs to make up for the two dollars they were charged, and piracy goes up, and the music industry has to charge more to XM Sirius to make up for it, then the subscribers go online and download a few songs to make up for the two dollars they were charged, and piracy goes up, and the music industry has to charge more to XM Sirius to make up for it, then the subscribers…. yada yada yada.

It will never stop until the music industry finally pulls their heads out.

bigpicture says:

Re: And so on... and so on... and so on....

Let’s simplify it all. It is not really their music (the Recording Companies that is) they stole it from the musicians who created it, so that they could monopolize it under the (special buddies interests) monopolization laws.

But since previously they had provided mostly the only way (both a legal and technical monopoly) to deliver this music to the fans, then the fans still considered the extortion prices to be value.

Now that they have lost their technical monopoly (others can deliver the same service better and for less) then they are trying to further leverage their legal monopoly by such devious tactics as suing the potential customers, and other smaller more defenseless entities such as Real, Sirius etc. Why have they not taken on the deep pockets like Google, because Google can buy more politicians and judges than them.

Ryan says:

This isn't any different...

This is surprising…how? Actually, I’m guess I’m a little surprised that Sirius apparently stated explicitly that the price raise is for the RIAA tax, instead of subtly working it in relatively unnoticed.

Taxes are always paid primarily by the end users. Minimum wage? Companies don’t pay employees more, they hire fewer. Corporate and payroll taxes? Companies raise prices on consumers and lower wages(or cut workers).

This tax just goes directly to pay a large corporation deep in the pocket of politicians instead of to the politicians themselves(that they then redirect to their contributors, of course). Business as usual.

Ryan says:

Re: Re: This isn't any different...

Maybe you’re just arguing semantics, but you can tax a corporation–hence, “corporate tax”. If you mean that the hit ultimately comes to the consumer, worker, or shareholder, then I agree and this is precisely what I was saying in that taxes are ultimately paid by the end users. Businesses need to keep prices low to attract customers and wages high to get workers, but if all businesses are paying it then why would shareholders take the hit? They just pass it on…

Anonymous Coward says:

Re: This isn't any different...

“Taxes are always paid primarily by the end users. Minimum wage? Companies don’t pay employees more, they hire fewer. Corporate and payroll taxes? Companies raise prices on consumers and lower wages(or cut workers).”

Wait I thought the free market established prices? Corporations cant just charge whatever they want . . . can they? Isnt this the basis of market capitalism?

Anonymous Coward says:

Re: Re: Re: This isn't any different...

“No. Corporations can charge anything they desire. Anything at all. However, consumers may or may not buy their product based on that. That is the free market at work.”

Exactly so corporations cant just pass on taxes imposed on them to consumers, eventually they will price themselves out the market and so out of business. By “free market” reasoning actually they would only be able to pass on taxes to thier customers, if they were already selling thier product too cheaply.

Ryan says:

Re: Re: Re:2 This isn't any different...

Taxes are applied to everybody selling the product, so they raise the market cost of doing business. Businesses don’t choose whether or not to pay the tax.

Additionally, many markets are not particularly free thanks to artificially high cost-of-entry and overhead requirements. The market for satellite technology, especially, has an astronomical cost of entry, so there’s not a whole lot of competition anyway. Many consumers will just drop out, but the ones that want satellite radio will pay more. When the government mandates taxes or a nonsensical royalty such as this one, consumers in general will pay more.

interval says:

Re: Re:

@diabolic: “…hates the established music industry. Maybe its because they tax us…”

Well, one point; The Music Industry can’t levee a tax, taxes are compulsory, you don’t have to pay the RIAA or their many front organizations a penny. Which I have already sworn to do. Looks like its time to ditch my Sirius subscription.

vastrightwing (profile) says:

Who's stealing?

Let’s not kid ourselves, RIAA isn’t about making sure musicians get paid, it’s about ripping consumers off as much as possible. They see “piracy” as an opportunity. Piracy is a rip off! But not to the RIIA, to the consumer! The RIAA is looting us like a mob loots during a riot. The riot is this thing called piracy. We’ve all been led down the path that piracy is some crisis; it’s been all fabricated by the RIAA. There is a business model and the music industry is making money, but they are also ripping us off too.

R. Miles (profile) says:


was answered with:
“Not quite sure how I missed this earlier”

Too bad monies are taken away from our public education system, as reading comprehension is becoming a lost art.

Now, on topic:
It’s a good thing I no longer listen to radio, free or not.
Now I’ll just sit back and wait until the tax propagates itself to online music.

Wait. $1.30 per song.


vastrightwing (profile) says:


Just how do you “steal” music? If you mean copying: copying does not equal stealing: there is no damage, no one lost anything. You can not make the argument of potential loss of income being equivalent to theft. Using that argument, then cooking food at home would the equivalent of stealing money from a restaurant because you didn’t patronize the restaurant.

Nick Burns (profile) says:

Re: how to beat the increase

When I signed up early this year (after my 3mos free with the new vehicle), I didn’t see a lifetime membership, otherwise I think I would have opted for it over the 3year subscription. I don’t believe they can charge me more since I’m all paid up for that, though I will keep an eye on my cc statement and complain/quit if they do charge it!

Trails says:

This I don't get

“Just imagine what will happen if the RIAA gets its wish and gets to add a similar tax to terrestrial radio stations as well. If you thought radio was chock full of commercials before…”

So the RIAA has a lot of moves which we’ve shown to be bad for everyone except the RIAA. I get that, it’s unbridled self interest and greed.

This one I don’t get. Radio is how they foist off their chosen “stars” on the public, via payolla, for e.g.

If they get to “Tax” radio stations, they will essentially cause more people to stop listening to radio, they’ll go look for music from independent sources, internet, pirate bay, etc…

While I don’t agree with many RIAA moves, they are at least strategic in their self-interest. This strikes me as strategically stupid for them. Am I missing something?

Derek Kerton (profile) says:

Re: This I don't get

Answer: They are consistent in their ability to not understand change. They don’t see it coming, they don’t see that it came, and they don’t see that they can be the cause of it. They probably think that there will be no effect from the “tiny” charge. History has taught them to think thus.

They are used to foisting off various fees through myriad collection agencies, and for people to continue more or less acting as they ahd before the fees. This WAS because they had a lock on discovery and distribution, and because demand for music IS very strong (inelastic). But now that their are other options, people can react to a change and seek their media elsewhere, either legally or not.

Fairly consistently, it appears that if the music market were a chess game, the RIAA plans just one move at a time, and ignores the fact that the other player may take a turn.

goober says:

The RIAA tax has always been there

The royalty fee has always been an aspect of XM’s programming. The difference here is that previously, XM buried those fees in the monthly subscription, and now, they are allowed by a judge to pass them on explicitly.

The problem with SiriusXM’s response (this is for you ED BUSECK), is that the fees only increase by .5%, but SiriusXM used the judges ruling as a justification to pass the entire amount on to its subscribers, rather than just the increase. This has the effect if increasing your monthly subscription, despite promises not to do so as a condition of the merger.

I hate the RIAA says:

You (Techdirt) didn't miss it

As a matter of fact, I used the information on your website when I called the company to complain after I received their later alerting me to the increase. The increase in rates is greater than the tax imposed on Sirius. But it provides a nice excuse to raise rates even they were not supposed to after the merger. A win-win for the RIAA and Sirius which equates to 2 loses for the consumer.

It worked out better that I just signed up for life and saved money and do not (I think) have to worry about this BS tax.

F*** the RIAA.

Derek Kerton (profile) says:

Re: Re:


Because your car doesn’t have an AM or FM radio, right? And you don’t carry a cellphone or have access to an MP3 player where you live. Fire up that old 8-track under the dash, and see if it doesn’t play music.

Your monopoly accusation declares that you don’t have any options for substitutes. Well, I’m glad we have comments coming in from Cuba. Hasta Luego.

Derek Kerton (profile) says:

Re: Re:

“companies don’t pay taxes, end users do.”

Lots of people arguing this line in these comments. But it’s a very trite simplification of fiscal issues. Of course taxes are paid by people in the end. People are the only things that are real. Corporations and businesses are imaginary, arbitrarily created entities, which are ultimately owned by people and financed by purchases of end customers. No news there. But it adds another group of people and busts your assumption that all costs are borne by “end users”, namely “shareholders”. All taxes are paid by shareholders OR end users, and it’s unclear in what proportion.

But the point you’re trying to make seems to be that taxing corporations is futile because the taxes just get passed back to consumers. You seem to think that “we are only taxing ourselves” or that it would be simpler (but not desired) just to increase income taxes or do a poll tax. Taxes do more than just taxing ourselves to pay ourselves, they redistribute money, and have distortion effects on the market.

But what if the fiscal policy were intended to inflict a distortion in the market, like a pollution tax? Occasionally, we actually want to distort markets towards a more desirable equilibrium (like one where pollution externalities ARE counted.)

Love them or hate them (and I suspect most choose the latter), taxes CAN be a much more nuanced tool than you seem willing to acknowledge. They can be used to gain revenues for specific things that incur costs, such as highway tolls. Or to dissuade certain behavior, such as smoking. Or to encourage certain behavior, such as home ownership. I’m not casting a judgement on any of those fiscal policies, merely stating the more nuanced reality that taxes beset onto corporations/industries are not unilaterally “passed on to the people”.

Even if passed on to the customer 100%, they only get passed back to consumers of THAT company/industry. Thus, it is a tax on that industry, which offers advantages for competing substitutes.

When a tax is placed on an industry, supply meets demand at a lower volume. A reduction in total production has unpredictable effects on average costs. Basically, there are many intended and unintended consequences of a tax on a specific good, but the burden of the tax is usually split between shareholders and consumer, not just passed on 100%.

Despite your best efforts to simplify the world, it remains complicated.

Also, this is a tangent, since the article is about RIAA fees, not taxes. Understood. As we have seen in these comments, Sirius may lose enough customers by raising fees that it would be better to eat the loss.

Derek Kerton (profile) says:

The Price of XM

Got a new car, and I’m in the free trial phase of XM. They’re sending me brochures fast and furious. But I think it’s about $17/mo for the radio+traffic service.

I know many people pay this, but WTF? I can get radio for free, I have an MP3 player with all my faves in the car, and Google gives (better) traffic info for free.

I listen to a little talk, and the comedy channels. What I hear is digitized crap, still full of ads. The comedy routines are repetitive. The damned thing cuts in and out when there are trees, buildings, bridges, hillsides, etc. Overall, the XM product is very slightly better than terrestrial. I don’t commute, so have limited use. I am willing to pay up to $3/mo for a subscription.

I can’t believe people are willing to pay the going rates. I guess that’s one of the great things about the market. Different people have very diverse demand.

Mike Raphone says:

Sirius XM Passes RIAA Tax (FEE) On To Consumers

I am a subscriber to Sirius/XM and I am not happy. I intend to contact my Senator and Congressman to find out why the Government has not forced Sirius/XM to honor the agreement they made with the Government in order to get approval for the merger. Sirius and XM agreed not to raise rates for Three Years. They have actually raised rates by:

1) Elimnated a benefit, that included in the subscription fee, access to Sirius/XM via the Internet. Sirius/XM is now charging subscribers a fee of $12.95 to listen to their programming via the Internet. Why doesn’t the Government considered that charge, an increase in the subscription fee.

2) The RIAA fee that Sirius/XM now claims to pass on to subscribers, Sirius/XM represents as justifiable. Author Mike Masnick pointed out that Sirius/XM is misleading the FCC and Subscribers because the original subscription fee included payment to the RIAA for using copyrighted music. Sirius/XM management is simply using a small increase in RIAA fees to increase subscriber rates in violation of the merger agreement.

In my opinion Sirius/XM have violated the terms set forth by the Government to allow the merger. The Sirius/XM company should be forced to refund all increases in rates and fees to subscribers. The company should then be fined for violating the agreement with the Government to obtain the right to merge.

Tristan Young says:

RIAA - Radio - Satellite

What is this Radio and Satellite you speak of?

Honestly, does anyone listen to that crap anymore?

99% of the crap played contains 100% or more crap, that last 1% is miscellaneous crap, containing crapmercials for crappy products and services.

Let the RIAA tax the crap out of that crap – it’s still crap, and no one should be listening to it. Keep crap out of your ear – stick it in the toilet where it belongs!

Danny Bill (profile) says:


Before anyone commits to a subscription, try googling “XM Radio Complaints” They are rampant. I paid a full year in advance (back in November) for the service and also paid for a full year for the upgraded “Best of Sirius”. The result was: I only got 8 months as they started billing me for another year in May! I refused to pay until my year was up in November 2009, now I have NO service. Trying to get help from their shoddy CS people who can’t speak English let alone think is impossible. This company is in trouble (yesterday’s stock quote was $0.60 a share!) My advice: Get an HD radio, or stick to your iPods! At least on the iPod you don’t have those annoying commercials

ChrisDG74 says:


Not to get into a pissing contest, but the stock was at $.05 a few months ago. An increase of 12x does not scream of a company in trouble. HD radio is pathetic. It has as many commercials as regular radio(because that’s what it is-just more channels of regular radio). I have been a SiriusXM subscriber since 2005 (and XM in my wife’s car since 12/08). Never had any issues with customer service, aside from them calling every so often trying to get me to re-activate the radio I cancelled that was in my wife’s old car, that I don’t need anymore).

Anonymous Coward says:

bull shit

no one is going to go and look for independent music
there just going to download it from p2p stop lieing to your self and us where not stupid

i cant remember the last time a album was worth pay money for

i use the web for all my music youtube mtv yahoo and what not

i do not care about there ads what so ever and when the radio goes in to 10 mins of songs and 45 mins of talk to commercials i just change the channle

and im more then 90% less likly to ever buy the bull shit that they were advertise on there

anon says:

So a musician records a song, and the radio gets lots of listeners and advertising revenue because of it. In return, the person who wrote the song, who may or may not have actually played the song, gets money. The performance of the song is usually a joint effort between the person who wrote it and the person who played it, but if the musician playing on the recording didn’t write the song, even if they’re in the band with the songwriter, they get nothing.

That means every time a Beatles song is played, Paul and John get paid while Ringo and George get nothing. When a Led Zeppelin song is played, Plant and Page get paid, while Bonham and Jones get nothing.

What is proposed is change to the copyright law that says that the musicians playing on the recording, as well as the person who wrote the song, should get a little bit of money each time radio uses the song to generate advertising revenue, which is every time any song is played.

I say that’s fair enough. Have you ever heard of this imbalance of wages in any other field? Does the person who draws the blueprints get payed while the contractor that builds it gets nothing? Does the script writer get paid while the actors get nothing?

To make it fair, the radio stations will have to pay the musicians and the writers. They’re only in it for the money. If you haven’t noticed, commercial radio stations only play the songs that are guaranteed to generate advertising revenue. They no longer care about the music, only reaching the demographic so they can sell ads.

The radio tax wouldn’t even go to the government, which means IT’S NOT A TAX AT ALL!!! The radio industry is just calling it a tax, because it’s a damn fine way to get people upset at the government, and get them on their side. Well, people that don’t read the details anyway.

So good job people. Shoot down the “tax”! Don’t bother looking it up or educating yourself so you can make an informed decision.

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