July 19, 2017
On July 18, we wrapped up a very important legal process to support music creators.
We made closing arguments in the SDARS III proceeding, which will establish royalty rates for 2018-2022 for Sirius XM’s satellite radio service and for Music Choice’s and Muzak’s residential audio service.
We proposed rates that would either be 23 percent of Sirius XM’s revenue or a per subscriber rate starting at $2.48 per subscriber, per month in 2018 with moderate annual increases, whichever is greater. We established the proposal based on the analysis of experts. The current rate for Sirius XM’s satellite radio service is 11 percent of Sirius XM’s “Gross Revenues” (as the Copyright Royalty Board’s regulations define that term) in 2017.
We also proposed a lower per-subscriber royalty rate for free trial subscribers in the second and third months of their subscriptions. These free trial subscribers do not include paid trial subscribers, where a third party – usually the auto manufacturer – pays for the subscriber’s trial period. In such cases, the regular rate would still apply.
For Music Choice and Muzak, we proposed a per subscriber rate starting at $0.019 per subscriber per month with annual increases. The current rate for Music Choice’s and Muzak’s cable/satellite TV music services is 8.5 pecent of Gross Revenues in 2017.
Our closing arguments represent the final step in an effort that began last year. We conducted extensive research throughout the process to establish a fair rate proposal. We also submitted robust testimony from economists, experts and representatives of recording artists, major labels and indie labels to support our proposal.
We expect a decision no later than December 16.