Establishing Fair Market Value Royalty Rates

Background

Since 1998, when the digital music industry was in its early stages, satellite radio services enjoyed a government-enforced below-market value royalty rate standard. As a result, satellite radio services like SiriusXM paid below-market rates, while the recording artists and rights owners SoundExchange represents subsidized these companies’ growth.

For years, SoundExchange urged Congress to establish rate standard parity so all digital services are subject to a “willing buyer, willing seller” or fair market value royalty rate standards.

Legislation to Establish Fair Market Value Royalty Rates:

SoundExchange worked with Congress on this issue, resulting in The Fair Play Fair Pay Act of 2017, introduced by Rep. Jerrold Nadler (D-NY) and then-Rep. Marsha Blackburn (R-TN). This legislation sought to establish a “willing buyer, willing seller” fair market value rate standard for all digital platforms.

The “Win”

When the MMA was signed into law it contained language from the Fair Play Fair Pay Act to establish a “willing buyer, willing seller” rate standard to require all digital platforms to pay fair market value for their music.