The Satellite Question: Why SiriusXM Should Pay Higher Performance Royalties to Artists

On Feb. 14, the Copyright Royalty Board issued a “final determination” setting SiriusXM’s statutory sound recording performance royalty rate for 2013 at 9% of “gross revenue.” This rate is too low by several percentage points, depriving artists and labels of tens of millions of dollars of royalty payments that will instead flow into SiriusXM’s coffers.

It is hard to argue that SiriusXM still needs a government-sanctioned discount from rates that the CRB deems appropriate. But that’s in essence the argument the company made in the CRB proceeding to set rates for 2013-17. In written testimony, Karmazin warned against an increase that could “take improper advantage of the company’s only recently improved economic circumstances” and “jeopardize the company’s ability to earn a fair return on long-term investments to which investors in our company are entitled.” In a decision signed by two of the three judges, the CRB appears to have at least partially heeded that warning.