Judge Certifies Class Action Suit For Pre-1972 Recordings
SiriusXM has seen better days. The satellite radio provider was dealt a bit of a blow this week when a federal judge certified that the Flo and Eddie lawsuit regarding royalties would garner class action status. Instead of Flo and Eddie against SiriusXM, it can now be anyone with pre-1972 music vs. SiriusXM. The suit could carry ramifications across the digital sphere.
Judge Philip Gutierrez sided with Flo and Eddie on the matter, and seems to have agreed that the damages proposed, 100% of all revenues attributed to pre-1972 recordings are at play. It is estimated that somewhere between 5% and 10% of SiriusXM’s revenue stream could be impacted. With billions of dollars in revenue, the numbers are quite substantial. Essentially, between $50 million and $100 million of each billion in revenue is on the table. The suit goes back to August of 2009. Sound exchange estimates that between 10% and 15% of SiriusXM’s revenue is tied to pre-1972 recordings. Either way, the numbers can grow substantially . SiriusXM has reported roughly $20 billion in revenue since 2009. Using a 10% figure, the exposure could be as high as $2 billion.
As class action suits go, this one can be quite scary because there is an extensive record of what songs have been played. SiriusXM defense is to somehow demonstrate that the revenue from the play of such songs is as low as possible, because there is no real way the company can say it did not benefit from airing the music.
Lets say 10% of all revenues is attributable to pre 1972 music for the sake of this running the #. Do you think all of that 10% goes to royalties? That would mean that ALL of their revenue goes towards royalties, there is not profit or monies to pay any of the other expenses. That could not be the case. No, it is more like…..of that 10% of revenue attributable to pre 1972, about 15% of that will go to royalties. See the difference?
Using the above #s
20Bn x 10% = 2 Bn X 15% = 300 mn app exposure not 2 bn Possibly half that if the # is 5% pre 1972 or 150 mn
“Essentially, between $50 million and $100 million of each billion in revenue is on the table.”
For the assessment of the royalty rate that was not accounted for during that time frame.
Your #s are way off. Please revise your article as it is very much mis information. Unintentional maybe but very wrong nonetheless.
You are right. Moreover, at the moment it is only the state of California. New York is still in question. We should also expect an appeal all the way to the Supreme Court because way too much is on the table for so many.
Denco essentially has it. For the year of alleged infringement, they subtract the revenue for non-music stations and music stations that play no pre-1972. Then they can identify the pre-1972 songs for the year.
This gives them all revenue raised from those songs for the year. To this they apply a percentage set and approved by the Copyright Royalty Board, which has been doing this for Sirius since 2008. For this year the rate is about ten percent, rising to eleven percent in 2017, after which a new agreement must be negotiated with the CRB. The resulting sum is paid over to SoundExchange, who distributes it to the artists and copyright holders.
It’s important to remember that the statute of limitations applies to copyright infringement claims brought against Sirius. In New York the trial judge set the length at three years. So if you tried to sue Sirius tomorrow for an infringement you claim occurred in 2011, you are too late. You missed the three year window.
denco is correct.
Gross revenue does not equal royalties paid (or owed).
The sum of money to be paid annually by Sirius for performance royalties is calculated by taking the gross revenue from all music stations, subtracting from that revenue all the revenue produced by playing pre-1972 music, and multiplying that by a percentage determined by the Copyright Review Board. Currently this percentage is 9 or 9 and a half on its way to 11 percent in 2017.
So if Sirius loses the case and has to pay then, for each year, Sirius would take the amount of revenue that they had set aside for pre-1972 royalty payments and multiply that by the percentage and turned that money over to SoundExchange.
What percentage would that be? Probably whatever the CRB percentage was for that year. The Statute of Limitations, in New York at least, would only permit suits to recover unpaid royalties within three years of when Sirius infringed on the copyright by not paying for playing.
The possible GOTCHA! would be if Judge Gutierrez, who doesn’t seem to like Sirius much, got the jury to award punitive damages, which doesn’t seem likely since Sirius couldn’t be expected to pay performance royalties that no one had asked them for.
We are talking interstate commerce here. How do the states get involved involved in royalty issues?
Go back to the infancy of the country and it took a long time to get interstate commerce on a level playing field because of protective laws states were passing.
I remember the days of Payola when record companies and artists were paying radio stations to play their recordings.
They got prosecuted for doing that. Now, they want to be paid for playing them when they are close to a half century old?
All right. If you don’t want free, accurate information, but would rather supplement your ignorant knowledge of the subjects with the ignorant knowledge of others, be my guest.
The California federal district court’s Judge Gutierrez who granted Flo & Eddie’s request to certify the case for class action has suspended his class action ruling at the request of Sirius for an appeal to the Court of Appeals to determine if it was improper for the Judge to certify the case for class action after he had already decided the case for F&E.
http://www.bna.com/turtles-cla.....7179927559
OlBlueEyes,
Moreover, sirius just won the cae in Florida. Judge Gutierrez is an activist from Califirnia who failed to realize the avalanche consequences of his unwise and poor decision. There is not way in hell the decision will stand an appeal. The only way the matter may be resolved if the Congress changes music patent laws.
Where is Spencer’s follow up and “analysis” on the Florida ruling. Not only has he not corrected the mis information but now he has decided that this “positive” ruling for SIRI is not of the “same” importance as the previous “negative” ruling for SIRI….