Services like Pandora want royalty parity with satellite services, and soon the amount they pay won’t have to come down quite as far. The percentage of revenue paid by Sirius XM to play recorded music is going up incrementally through 2017.
The last time the rate increased was in 2007, when the rate was set at 8%. The Copyright Royalty Board has determined that it will go to 9% in 2013, and then rise 0.5% each year through 2017, arriving at 11% of total gross revenue.
The money will go to SoundExchange for distribution to artists and labels.
The decision was seen as being good for Sirius – according to a Bloomberg report, Evercore Partners analyst Bryan Kraft described the increases as manageable. They will be in small enough bites that they can be passed along to subscribers without substantial risk of pricing some of them away from the service.