BMI is taking SiriusXM to court after the two sides failed to reach an agreement on royalty rates during more than two years of negotiations, arguing that the satcaster is “no longer a startup” and should pay songwriters more.
In a court filing today, BMI asked a Manhattan federal judge to uphold a higher royalty rate it asked SiriusXM to pay — citing increased revenue for the radio giant and a shift toward more lucrative digital streaming.
“SiriusXM's financial performance and expansion of its digital offerings make it clear that it is no longer a startup in a nascent industry,” lawyers for the rights group wrote. “However, despite its secure and successful position, Sirius has continued to pay songwriters – who create the music essential to SiriusXM's business – at prices that are lower than they were negotiated decades ago, when satellite radio was an infant industry with an uncertain future.”
A SiriusXM spokeswoman declined to comment on BMI's case.
BMI is a so-called performance rights organization that collects copyrights owed to publishers and songwriters when their songs are performed in public, offering blanket licenses that allow the use of more than 22 million tracks. When BMI can't agree with a licensee like SiriusXM, either side can ask a federal judge to decide the dispute and set a reasonable rate.
In doing so Thursday, BMI pointed to what it sees as key changes in SiriusXM's business model since the two licenses were last negotiated in 2018 — namely, an increasing reliance on Internet streaming rather than old-school satellite radio.
“As a result of these changes, SiriusXM's business has changed and is more like a music streaming service than a traditional satellite radio or broadcast radio station,” BMI's lawyers wrote. “Digital music services pay higher rates to BMI than satellite radio, and the new SiriusXM rate should reflect this expansion of digital performances.”
The specific terms of the royalty rate BMI is seeking from SiriusXM were not disclosed in court filings because BMI said it was “competitively sensitive.” The new rate will cover the period from January 1, 2022 to December 31, 2026.
In a statement announcing the case on Thursday, BMI said songwriters “shouldn't accept an outdated rate that significantly devalues their music.”
“After trying to negotiate in good faith with SiriusXM for more than two years, we were forced to file this lawsuit given their insistence on not underpaying the creators of the music that drives the bulk of their business,” said SiriusXM's president. BMI. Mike O'Neill he wrote “We will continue to fight for fair and appropriate prices when we believe the music our songwriters and composers create is significantly undervalued.”
The filing of the new case was celebrated on Thursday by the National Association of Music Publishers, with president and CEO David the Israelite saying the group was “extremely pleased” with BMI's decision to “demand what is fair”.
“Companies like SiriusXM have huge profit margins fueled by music creators,” Israelite said in a statement. “We fully support BMI in their fight for the value of songs.”
BMI isn't the only rights group in a dispute with SiriusXM over its move to streaming. In a lawsuit last year, SoundExchange accused the company of using betting tricks – that is, manipulating how it bundles its satellite and streaming offerings – as part of a scheme to “overpay” more than $150 million in royalties. SiriusXM later fired back, denying the lawsuit's “false allegations.” This case remains pending.
Read BMI's full report against SiriusXM here:
from our partners at https://www.billboard.com/pro/bmi-siriusxm-court-royalty-rates-underpaying-creators/
