An Internet Radio Development that Recording Artists Should Watch

Sirius XM, the U.S. satellite radio provider and one of the largest licensees for the compulsory sound recording public performance licenses administered by SoundExchange, hopes to cut SoundExchange out of the equation and obtain negotiated licenses directly from the record labels.

A directly negotiated license between Sirius-XM and record labels would be very significant for recording artists since Sirius-XM is proposing funneling the performers’ share of the royalty through the record label rather than through SoundExchange. SoundExchange is statutorily obligated to pay performers 50% of the collected sound recording public performance royalties; record labels do not have that same obligation. That means royalties going through the record labels might be subject to recoupment and cross-collateralization provisions in the artists' recording contracts. It’s uncertain how a Sirius-XM-record label negotiated agreement would impact smaller internet and digital radio services.

You can view the letter Sirius XM sent to record labels as well as the license agreement Sirius SM is proposing to record labels at this link: