SoundExchange has filed a lawsuit against SiriusXM Radio, claiming the satcaster owes a "massive" underpayment of digital royalties from 2007-2012. According to SoundExchange, SiriusXM "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 owes between $50 and $100 million, or possibly even more, and is now seeking to recover these funds 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/CEO of 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."
SoundExchange also notes that during this same time frame, SiriusXM saw its subscriber base grow from 17 million to 24 million, and its revenue increase from $2.06 billion to $3.4 billion – a 65 percent increase. The organization adds that 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 on Monday in the U.S. District Court for the District of Columbia.