SoundExchange says the suit aims to recover a “massive underpayment” of digital royalties 2007-2012. “During this time, the satellite radio company took a number of impermissible deductions and exemptions in calculating its royalty payments to SoundExchange, including deducting for pre-1972 sound recordings and certain channel packages containing music. In addition, SiriusXM failed to pay the legally required fees due for several late payments within the same period. SoundExchange believes SiriusXM’s underpayments amounted to $50 to $100 million or more, which it is seeking to recover on behalf of the artists and labels it represents.”
“SiriusXM is knowingly withholding royalties from the creators who bring life to their service, even as the company continues to experience unprecedented and explosive growth,” said Michael Huppe, president and CEO, SoundExchange. “We cannot sit by and watch this multi-billion dollar company reap record profits from the creative contributions of artists and labels without paying them everything they deserve.”
During the same time period that SiriusXM underpaid musicians for this critical part of their service, the company saw its subscriber base grow from 17 million to 24 million, and its revenue increase from $2.06 billion to $3.4 billion – a revenue bump of 65%.
SiriusXM is required to pay SoundExchange for the use of the statutory license, which allows the service to broadcast any commercially available sound recording. The lawsuit was filed in the United States District Court for the District of Columbia.