In early March, in advance of a hearing to determine whether this settlement gets a judge’s final approval, the RIAA, SAG-AFTRA, AFM, SoundExchange and others requested the opportunity to submit an amicus brief expressing their concerns.
According to this brief, “[I]t is clear from the settlement’s face, as well as obvious marketplace facts, that the proposed royalty rate is well below the market rate for sound recordings, particularly classic sound recordings that are among the world’s most valuable. Far from having anything to do with the settlement’s economic terms, this language just gives Sirius XM fodder for future rate-setting proceedings — at the expense of copyright owners and recording artists.”
The major labels and other interjectors say that a 10-year license of any sort “is virtually unheard of in the music industry, where new platforms, technologies, and business models are constantly emerging,” and that a 5.5 percent rate isn’t close to the statutory license rate of 11 percent currently being paid by SiriusXM. They argue that not only has SiriusXM included “gratuitous” language in its settlement in order to arm itself with marketplace evidence moving forward, but that the settlement amounts to using the courts to arrive at a new compulsory license that effectively operates on an “opt-out” basis.
“Indeed, under the proposed settlement, if owners do not declare themselves, then Sirius XM gets to perform their recordings for free — a windfall that should raise red flags for the Court,” states the brief (read here) authored by Daniel Rozansky and Joshua Segal at Jenner & Block.