Sirius XM Holdings Inc (NASDAQ:SIRI) will start paying about 41% more for the music it plays on the satellite-radio service as from next year. The federal Copyright Royalty Board (CRB) announced recently that it has increased the rates for the SiriusXM effective in 2018 although the music artists and labels still feel it falls short of the industry expectations.
From next year, Sirius, the only sole satellite radio service across the US will commence paying 15.5% gross revenue throughout up to 2022. The new rates for the compulsory and government-issued licenses in the radio-related services are usually revised every five years. According to Cary Sherman, Industry Association of America Chief Executive, the recent decision is an important move for the industry but insisted that the rates still fall short of what the music creators deserve.
For many years, Sirius has been pocketing billions of dollars by paying the music creators below the industry-market rates while the company boasted about its huge profits it’s making in the music industry and how it owns the larger stake of the market share.
In relation to the statement by the CRB, Sirius will start paying the new rates, though the full determination is yet to be confirmed publicly on the CRB’s website as the participants analyze the document to ensure that the company data is not revealed publicly. The new rate will jump from the 11% to 41% that Sirius should pay, although the market analysts claim it’s short of 23% that SoundExchange had advocated for to the CRB judges who were appointed by the US Librarian of Congress.
However, the new rate is better compared to what the company is paying in the current year. Though the SoundExchange are apparently happy for the higher rate, they issued a statement urging the Congress to alter the disposition to allow judges to consider the cost of building the satellite infrastructure that the SiriusXM has incurred in the early days when the industry was still developing.