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Record companies seek 10 percent increase in royalties
The end of a royalty agreement between the country's two leading satellite radio operators and a music industry organization may have a serious effect on how much money the companies need to dish out for music. At the end of the year, XM's and Sirius' deal with SoundExchange -- the group responsible for collecting royalty fees for artists and record labels -- is set to expire and along with it the terms of how much the satellite companies owe to broadcast certain music.
A move sure to have implications on the satellite radio industry, SoundExchange - representing record companies like Universal Music Group, Warner Music Group, Vivendi and Sony BMG - is asking for a 10 percent increased cut of Sirius' and XM's revenues next year with the rate jumping to 23 percent by 2012.
According to press reports, both XM and Sirius currently pay somewhere around seven percent of their revenues to SoundExchange. And while the two rival companies are normally battling for more subscribers, on this issue they have come together to offer the music-royalties group a reported one percent slice of the pie. Company execs have called the demands "a major handicap."
But SoundExchange said it was the deal's current structure that allowed both satellite operators to get off the ground and a renegotiated rate for the group's popular programming is more than fair. The organization reported collecting $43 million in royalties from XM and Sirius during 2005 with an expected $55 to $60 million more this year.
The Library of Congress' Copyright Royalty Board is anticipated to make a final decision on the matter in the future.
www.SkyReport.com - used with permission
The end of a royalty agreement between the country's two leading satellite radio operators and a music industry organization may have a serious effect on how much money the companies need to dish out for music. At the end of the year, XM's and Sirius' deal with SoundExchange -- the group responsible for collecting royalty fees for artists and record labels -- is set to expire and along with it the terms of how much the satellite companies owe to broadcast certain music.
A move sure to have implications on the satellite radio industry, SoundExchange - representing record companies like Universal Music Group, Warner Music Group, Vivendi and Sony BMG - is asking for a 10 percent increased cut of Sirius' and XM's revenues next year with the rate jumping to 23 percent by 2012.
According to press reports, both XM and Sirius currently pay somewhere around seven percent of their revenues to SoundExchange. And while the two rival companies are normally battling for more subscribers, on this issue they have come together to offer the music-royalties group a reported one percent slice of the pie. Company execs have called the demands "a major handicap."
But SoundExchange said it was the deal's current structure that allowed both satellite operators to get off the ground and a renegotiated rate for the group's popular programming is more than fair. The organization reported collecting $43 million in royalties from XM and Sirius during 2005 with an expected $55 to $60 million more this year.
The Library of Congress' Copyright Royalty Board is anticipated to make a final decision on the matter in the future.
www.SkyReport.com - used with permission