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SiriusXM sued for millions in 'unpaid' music royalties

Royalties group takes satellite radio service to court for up to $100m

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Digital rights organisation SoundExchange has filed a lawsuit against satellite radio giant SiriusXM for what it termed "massive underpayment of royalties" from 2007 to 2012.

The nonprofit group, which collects digital royalties on behalf of artists, said it believed that the satellite radio service provider – which had 25 million subscribers as of last quarter – owed somewhere between $50m and $100m for making allegedly illegal deductions and exemptions when calculating the fees, including deducting for pre-1972 recordings.

SoundExchange also accused SiriusXM of leaving out the extra bump in money made from its Premier package as well as the funds that came in from its Family Friendly and Mostly Music packages in its royalty calculations. Just to top things off, the group also said the radio service had failed to pay the fees for several late payments during the six-year period.

“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 of SoundExchange, in a canned statement.

“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.”

Sound recordings were not given federal copyright protection until 1972 and instead relied on individual US states' laws for protection. SoundExchange claims that Sirius reduced its royalty payments by between 10 and 15 per cent, corresponding with the number of pre-1972 recordings played through Sirius's service.

According to the group, during the same time it was underpaying royalties, SiriusXM grew its subscribers from 17 million to 24 million and revenues from $2.06bn to $3.4bn. ®

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