Members of the '60s group The Turtles have filed a lawsuit against SiriusXM, alleging the satcaster owes royalties to the band due to a quirk of copyright law. The Wall Street Journal reports that federal copyright law only protects recordings made after 1972, and those before 1972 are protected under various state laws. The paper adds that, "California’s civil code explicitly protects pre-1972 sound recordings against unauthorized duplication until 2047, and state courts have ruled that sound recordings can be protected in a misappropriation, conversion, or unfair competition claim, he said. The suit, which is seeking class action status, is demanding at least $100 million in damages."
The rule had not been a problem for SiriusXM in the past, as the satcaster would inform SoundExchange of every single song it played, with a lump sum royalty payment. A source told the WSJ that this payment did not include pre-1972 songs, but since it wasn't broken down by song, SoundExhange distributed the royalties to all artists played on the satcaster.
However, the WSJ says in 2011, SoundExchange began asking for a more detailed report from the satcaster, and since then SiriusXM stopped reporting pre-1972 songs, therefore SoundExchange ceased paying out royalties to those artists, hence acts like the Turtles are now left out.
The WSJ adds that Pandora also stopped paying performance royalties in 2012 on pre-1972 songs, though this category of tunes represents a much smaller percentage of what is played on the popular online service, compared to SiriusXM.