Why Is This Nonprofit Trying to Put Sirius XM in the Penalty Box?
Sirius XM Radio (NASDAQ:SIRI) is in trouble with the law. With the rise of satellite and streaming radio services like Sirius XM, Pandora (NYSE:P), Spotify, and the upcoming iTunes Radio via Apple (NASDAQ:AAPL), it’s almost easy to forget these days that no music is free.
Radio listeners are increasingly paying for their music in more indirect ways, whether it is through subscriber packages, agreement fees, or advertising allowances. But still, no matter how one is hearing his or her music, someone is always still paying for those radio’s tunes — or at least they’re supposed to be.
That’s where Sirius XM’s lawsuit comes in. According to Reuters, the satellite radio service has been charged with underpaying SoundExchange Inc. for the recordings that it aired to paying subscribers from 2007 through 2012, failing to sufficiently fund the statutory license that gives the service permission to do so. The lawsuit claims that Sirius has been inaccurately reporting the total gross revenue it registers, cutting it by 10 to 15 percent in order to correspond with performances of pre-1972 recordings.