Labor Groups Oppose Sirius XM's 'Direct License' Proposal

Proposal Opposed

Two labor groups claim SIRIUS XM is proposing a "blatantly anti-artist and anti-union" deal that would make it difficult for artists to recoup their royalties, reports REUTERS, citing a story posted by THEWRAP.COM. AFTRA and the AMERICAN FEDERATION OF MUSICIANS have lined up against a "direct license" deal proposed by SIRIUS XM CEO MEL KARMAZIN.

"Under the current arrangement, SIRIUS XM pays the labels 50% of royalties," notes REUTERS, "the independent organization SOUNDEXCHANGE 45% and the AFTRA/AFM intellectual property fund 5%. Under the 'direct license' deal, SIRIUS XM would pay 100% of royalties to the labels. Artists who want royalties will then have to file a claim with the labels in order to be paid, according to AFTRA."

AFM Pres. RAY HAIR wrote to REUTERS, "the race by SIRIUS XM and independent record labels to grab performer copyright royalties hurts the music industry, it erodes the value of music industry-wide, where no one -- artists, musicians or record companies -- can earn a fair living creating and investing in the music everyone wants to hear."

Recording Academy Tells Members To Oppose

THE RECORDING ACADEMY Pres./CEO NEIL PORTNOW has also weighed in on the proposal, writing to his members:

"It has come to our attention that satellite broadcaster SIRIUS/XM is seeking to bypass the standard system of paying royalties. If they are allowed to do so, it will likely result in substantially reduced payments to artists and producers, a lowering of the value of performance royalties, and unnecessary conflict between artists and their labels."

PORTNOW suggests, "If you are an artist signed to the independent label, you can call your label today and request that it not direct license your recordings. In the interest of fairness and transparency, your label should continue to license through SOUNDEXCHANGE. If you own or manage an independent label, it is in your interest to refrain from direct licensing. While SIRIUS may be offering positive terms, the long-term effect of accepting a rate lower than the compulsory rate could be to reduce rates overall in the future. Creating downward pressure on the value of music may be good for SIRIUS/XM, but it’s bad for artists and labels."

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