BMI is taking SiriusXM to court after the two sides failed to reach a deal on royalty rates during more than two years of negotiations, arguing that the satcaster is “no longer a startup” and must pay more to songwriters.
In a petition filed in court today, BMI asked a Manhattan federal judge to uphold a higher royalty rate it has asked SiriusXM to pay – citing increased revenue for the radio giant and a shift toward more lucrative digital streaming.
“SiriusXM’s financial performance, and its expansion of its digital offerings, make clear it is no longer a startup in a nascent industry,” lawyers for the rights group wrote. “Yet, despite achieving its secure and successful position, Sirius has continued to pay songwriters — who create the music essential to SiriusXM’s business — at rates that are below those negotiated decades ago when satellite radio was an infant industry with an uncertain future.”
A spokeswoman for SiriusXM declined to comment on BMI’s case.
BMI is a so-called performance rights organization that collects copyright royalties owed to publishers and songwriters when their songs are performed publicly, offering blanket licenses that allow for the use of more than 22 million tracks. When BMI cannot agree with a licensee like SiriusXM, either side can ask a federal judge to decide the dispute and set a reasonable rate.
In doing so on Thursday, BMI pointed to what it sees as key shifts in SiriusXM’s business model since the two last negotiated a licensing deal in 2018 – namely, an increasing reliance on internet streaming rather than old-school satellite radio.
“As a result of these changes, SiriusXM’s business has shifted and is becoming more akin to a music streaming service than a traditional satellite radio or broadcast radio,” BMI’s attorneys wrote. “Digital music services pay higher rates to BMI than satellite radio, and the new SiriusXM rate should reflect this expansion of digital performances.”
The specific terms of the royalty rate that BMI is seeking from SiriusXM were not disclosed in court filings because BMI said it was “competitively sensitive.” The new rate would cover the period from January 1, 2022 to December 31, 2026.
In a statement announcing the case on Thursday, BMI said that songwriters “should not have to accept an outdated rate that significantly undervalues their music.”
“After attempting to negotiate with SiriusXM in good faith for more than two years, we were compelled to file this action given their insistence on underpaying the creators of the music that drives the majority of their business,” BMI president Mike O’Neill wrote. “We will continue to fight for fair and appropriate rates when we believe the music created by our songwriters and composers is being significantly undervalued.”
The filing of the new case was celebrated Thursday by the National Music Publishers’ Association, with president and CEO David Israelite saying the group was “extremely pleased” with BMI’s decision to “demand what’s fair.”
“Companies like SiriusXM have massive profit margins fueled by music creators,” Israelite said in a statement. “We fully support BMI in their fight for the value of songs.”
BMI isn’t the only rights group in a dispute with SiriusXM over its shift toward streaming. In a lawsuit last year, SoundExchange accused the company of using bookmaking trickery – namely, manipulating how it bundles its satellite and streaming offerings – as part of a scheme to “grossly underpay” royalties by more than $150 million. SiriusXM later fired back, denying the lawsuit’s “misguided allegations.” That case remains pending.
Go read BMI’s full petition against SiriusXM here:
