SOUNDEXCHANGE SUES SIRIUSXM

SoundExchange filed a lawsuit against SiriusXM Wednesday (8/16) with the United States District Court for the Eastern District of Virginia to recover “substantial” unpaid royalties and late fees owed under the Copyright Act for the use of sound recordings on the satellite streaming service. SoundExchange estimates that SiriusXM has withheld more than $150m in unpaid royalties since 2021.

The action filed by SoundExchange, the sole entity appointed by the U.S. government to collect and distribute digital streaming royalties under Section 114 of the Copyright Act, alleges that SiriusXM “improperly manipulated” federal regulations to create an artificially low calculation of the revenue on which it pays creator royalties by ascribing excessive and unjustified value to the webcasting component of its bundled packages and then removing that value from the satellite-radio royalty pool.

“It is extremely unfortunate that we must bring this action on behalf of creators against SiriusXM,” said SoundExchange President/CEO Michael Huppe. “In recent years we have viewed SiriusXM as a willingly lawful and compliant company that shares our desire for a robust streaming marketplace. But SiriusXM has and continues to wrongfully exploit the rules to significantly underpay the satellite royalties it owes. It's only because our repeated efforts to resolve this dispute have failed that we are forced to litigate on behalf of artists and rights owners upon whose hard work SiriusXM has built its business.”

SoundExchange is seeking compensatory damages and late fees for the years of underpayment, as well as an injunction preventing SiriusXM from continuing to use inappropriate revenue calculations on its satellite-radio payments.