Sirius XM Canada asking to cut artist fees


After years of losses, Sirius XM Canada wants to renegotiate the terms of its license to save millions of dollars a year. The Toronto-based satellite radio company’s license is up for renewal for the first time since it was issued in 2005, and its executives will ask the Canadian Radio-television and Telecommunications Commission (CRTC) to cut its mandatory contributions to artistic development funds by about 90%, reports The Globe and Mail.

“Sirius XM Canada has been losing money at a disturbing rate,” the company says in a filing to the CRTC.

While unprofitable, the company has paid $52-million to the CRTC in the last seven years. That’s almost $20-million more than Canada’s 400-plus commercial radio stations paid, in total, over the same time period. The CRTC takes money from radio broadcasters, and redirects it toward programming that helps recording artists produce content.

The company’s executives have painted a bleak picture of the future for the 120-channel service as it heads into licensing hearings in Ottawa on Thursday: Subscribers are difficult to find and even harder to keep, content is expensive and Internet-based music services are expanding rapidly thanks to the proliferation of mobile devices.

With off-the-dial, Internet-based competition intensifying and traditional radio holding its ground in the land up North, how the CRTC classifies the company and its services could determine whether the service survives there.

When it was awarded its license in 2005, the company was treated more like a cable company than a radio station. That meant that it had to redirect 5% of its revenue to the development of Canadian talent, compared to 0.5% for the country’s terrestrial radio stations.

Sirius XM Canada – which was formed in 2011 as a result of a merger between Sirius Canada and XM Canada and owned by a publicly traded company called Canadian Satellite Radio Holdings Inc. – was expected to post about a $100-million loss over the term of the contract when it was awarded its initial seven-year license.

In its most recent quarter, Sirius XM Canada posted a $2.6 million loss.

See the Globe and Mail story here