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SiriusXM's Two Faced Tuesday

We have written before (here and here) about the unconscionable refusal of SiriusXM (along with other online streaming services, such as Pandora) to pay royalties to artists who recorded music before an arbitrary cutoff date in February 1972. Project72 is leading the charge on this important fight for both the legacy greats and the unsung heroes who laid the foundation for the music we love today.

However, there is now a new wrinkle to the story that we would like to share. It is bad enough that SiriusXM is clinging to every last nickel pre-72 artists are owed, but it is even worse that they are doing so at a time of record earnings and profits. The company pleads poverty to Congress and runs to the courts to avoid paying pre-72 royalties while gorging on profits that would make Scrooge McDuck blush. Heck, this week they were making these two conflicting arguments at THE EXACT SAME TIME. 

At 8:00AM on Tuesday, I noticed SiriusXM’s quarterly earnings report was being released (if you are interested, you can listen to a recording of the conference call here, but it’s pretty boring). On the call, their CEO announced over $1 billion in revenue and quarterly earnings of $136 million. Below is the headline from Billboard.com:

SiriusXM Sees Growth in Earnings, Subscribers in Third Quarter

Then at 8:30AM, at literally the exact same time their CEO was proclaiming this profit gusher, the company’s lawyers rushed into court to challenge one of two recent rulings that confirmed royalties are indeed required under California law for pre-72 recordings. They also rushed into court to challenge the other ruling a couple of weeks ago. In their filings, they blasted the judges' legal reasoning as “absurd.” They also scoffed at the notion that the artists who fuel so many of their stations should get paid.

Once again, in the land of SiriusXM/Pandora doublespeak, pre-72 music matters when it comes to selling subscriptions and satisfying music fans, but it doesn’t count at all when it comes to paying the artists and record companies who created it.

Indeed, one look at the SiriusXM dial tells you all you need to know about the importance of this music to the company’s wildfire success – it is the foundation of the service’s ability to offer something for every kind of music fan. Need your pop megahits such as Iggy and Taylor – “Hits 1” and “Venus” are the first two stations on the SiriusXM digital dial. Want a deeper catalog? The next long block of stations is a steady stream dedicated to nothing but classic rock and roll, Motown, country greats, and even older standards – “40’s on 4,” “50’s on 5,” “60’s on 6,” “70’s on 7.” The names of these stations are a walking billboard for the variety and depth of coverage you can get on satellite radio – and an obvious moneymaking lure for potential subscribers of all ages and tastes.

And it’s not just these decade-dedicated stations where SiriusXM stiffs music’s greats as they grow older. If you continue down the dial to “The Bridge” and hear Loggins & Messina’s “Nobody But You,” that airplay turns out to be a “bridge to nowhere” in terms of any pay for Loggins and Messina (and, for example, Michael Omartian who played keyboards on the song). 

The “Classic Vinyl” station might “Light Your Fire” with one of the greatest rock songs ever recorded, but SiriusXM won’t even spark Doors guitarist Robby Krieger a single penny in royalties.  Try and collect royalties for Jimi Hendrix’s 1967 “Fire” and you’ll end up out in the cold whether it airs on “60’s on 6,” “Deep Tracks,” “Classic Vinyl,” or anywhere else on the SiriusXM dial.

Essentially, SiriusXM profits twice from these stations and this music – collecting subscription fees from fans and listeners on the front end, while ripping off musicians and labels by keeping their royalties on the back end.

This music is helping SiriusXM’s star burn bright today. However, if the company continues to talk out of both sides of its mouth and deny music creators the royalties they deserve, that success could all go up flames. People who love music aren’t going to put up with a product that degrades and devalues the people who created it.