The same week as the company completed its merger into “New Sirius,” SiriusXM will be facing another challenge related to its royalty rates. Broadcast Music, Inc, best known as BMI, took legal steps in its rate court to establish just compensation for its music licenses with SiriusXM.
This action follows prolonged negotiations that failed to yield an agreement, with SiriusXM pushing for reduced payments despite its transition towards a digital service model. BMI contends that the proposed rates devalue the contributions of its songwriters, composers, and publishers, whose work forms the backbone of SiriusXM’s offerings.
BMI President & CEO Mike O’Neill stated, “After attempting to negotiate with SiriusXM in good faith for more than two years, we were compelled to file this action given their insistence on underpaying the creators of the music that drives the majority of their business. SiriusXM’s proposal is a clear attempt to rely on a rate that was established when the company was very different in terms of its size, reach, degree of digital focus and revenue growth, and falls well below what is in the best interests of our affiliates. We will continue to fight for fair and appropriate rates when we believe the music created by our songwriters and composers is being significantly undervalued.”
SiriusXM is currently facing a $150 million SoundExchange lawsuit alleging unpaid royalties in US District Court. The lawsuit accuses SiriusXM of manipulating revenue calculations for royalty payments by overvaluing the webcasting portion of their service bundles. In response, the broadcaster claims SoundExchange actually owes them damages.
Meanwhile, a class action lawsuit in Washington state is challenging SiriusXM for allegedly deceiving consumers with a concealed “US Music Royalty” fee not included in the advertised subscription rates. This fee reportedly raises the cost of SiriusXM’s music plans by 21.4% at checkout, unlike other services that incorporate all costs upfront. Specifically, the lawsuit points out that for a Platinum plan listed at $23.99, an additional $5.13 is tacked on as a music royalty fee.
With 33.9 million subscribers, the suit says these fees contributed significantly to SiriusXM’s revenue, totaling $1.36 billion in 2023 alone.
