SoundExchange has submitted its rate proposal and direct testimony in the SDARS III rate proceeding. In that proceeding, the Copyright Royalty Board (CRB) will set rates for the years 2018-2022 for Sirius XM’s satellite radio service as well as for the cable/satellite TV music services provided by Music Choice and Muzak.
Based on the analysis of its experts, SoundExchange has proposed a rate that is the greater of (i) 23% of revenue and (ii) per subscriber rates starting at $ 2.48 per subscriber per month in 2018 with moderate annual increases. The current rates for Sirius XM’s satellite radio service are 10.5% of Sirius XM’s “Gross Revenues” as the CRB’s regulations define that term) in 2016 and 11% in 2017. For Music Choice and Muzak, SoundExchange proposed a per subscriber per month rate starting at $ 0.019 per subscriber per month with annual increases. The current rate for Music Choice’s and Muzak’s cable/satellite TV music services is 8.5% of Gross Revenues in both 2016 and 2017.
SoundExchange is proposing meaningful increases in the royalty rates, and has submitted robust testimony from economists, other experts and representatives of recording artists, major labels and indie labels in support of its rate proposal.
This initial round of testimony is one of several steps in the rate proceedings. SoundExchange and the other parties will now be able to examine each other’s rate proposals and testimony and submit rebuttal testimony by February 19, 2017. The CRB will hold a hearing beginning April 19, 2017, which will last several weeks. After final briefing by the parties, the CRB will issue its rate determination by December 15, 2017.