Karmazin And Huppe Speak Out On SiriusXM's 'Direct License' Proposal

Proposal Has Several Groups Upset

Last week (NET NEWS 10/28), ALL ACCESS reported that two labor groups claimed SIRIUS XM was proposing a "blatantly anti-artist and anti-union" deal that would make it difficult for artists to recoup their royalties. AFTRA and the AMERICAN FEDERATION OF MUSICIANS have lined up against a "direct license" deal proposed by SIRIUS XM CEO MEL KARMAZIN.

THE NEW YORK TIMES reports TODAY (11/7), "The flow of royalty payments, counted in pennies and nickels, may be the least glamorous part of the music industry. But because those royalties are the foundation of almost everyone’s paycheck, any change to the system can be controversial."

The report quotes SIRIUSXM CEO MEL KARMAZIN, who said in a statement FRIDAY that "direct agreements with labels offer more flexibility than is available through the basic compulsory licenses processed by SOUNDEXCHANGE.

"We think rights holders should benefit from a more competitive and open environment created by inviting individual labels to set their own value on their content rather than having to follow the industry collective," KARMAZIN told THE TIMES. "We are giving rights holders a choice and, if they are not interested, we will continue to work with them through SOUNDEXCHANGE."

SOUNDEXCHANGE Pres. MICHAEL J. HUPPE said "it was clear that SIRIUS was also seeking to pay less than the rates set by federal statute. 'At the end of the day, what they’re trying to do is get content for less money,' HUPPE told THE TIMES. "Our mission is to maximize the value of the content."

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