Royalties for Satellite Radio Set to Rise Steadily Through 2017

Recorded music royalties are set to rise in coming years for Sirius XM Radio, the only satellite radio service in the United States, as a result of a judgment by a panel of federal judges.

The three-judge panel, known as the Copyright Royalty Board, said that the rate paid by satellite radio for the use of sound recordings, currently 8 percent of the company’s gross revenue, would climb to 9 percent in 2013, and then rise 0.5 percentage point each year until reaching 11 percent in 2017. That money will be paid to SoundExchange, a nonprofit group that distributes digital royalties to record labels and musicians. The decision does not cover royalties to music publishers and songwriters, which are negotiated directly. It also does not cover rates for Internet radio, which are in place through 2015 and work under a different, per-stream model. Sirius’s royalty rate, the subject of nearly two years of litigation, was widely expected to rise. The last time the Copyright Royalty Board set rates for satellite radio, in late 2007, Sirius and XM were still struggling as separate companies; they merged the next year and still nearly went bankrupt before getting a $530 million loan from Liberty Media in 2009.