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Sirius settles with majors over pre-1972 recordings

By | Published on Monday 29 June 2015


American satellite broadcaster Sirius XM has reached a settlement with all three majors and ABKCO, best known for controlling the early Rolling Stones catalogue, over the long-rumbling pre-1972 copyright dispute in the US.

As much previously reported, US-wide federal copyright law only applies to sound recordings released from 1972 onwards, and is unusual in that it only provides a digital performing right for sound recording owners, so while satellite and online music services do need to pay royalties to artists and labels, other music channels like AM/FM radio do not.

Sirius is one service that does have to pay royalties, but it argued that payments were not due on pre-1972 recordings that are protected by state rather than federal copyright law. The logic went that the specific federal law that forced it to pay royalties on post-1972 repertoire didn’t apply to earlier works. Meanwhile older state-level copyright laws make no specific reference to satellite services, meaning Sirius was like any other radio station for pre-1972 records, and AM/FM stations don’t pay the labels anything whatever tracks they play.

But the record companies did not agree, arguing that actually royalties were due on older repertoire because state laws – in California and New York at least – while admittedly vague on what specific controls they provided sound recording copyright owners, didn’t specifically state that labels did not have a general performing right, like that enjoyed by song copyrights Stateside and recording copyrights as well in most other countries.

But, countered Sirius (and Pandora, which is also affected by this), if there was a general performing right for sound recording copyrights at a state level, why hadn’t the labels been charging golden oldie AM/FM radio stations all these years whenever they played tracks from the 1950s and 1960s? It’s a good question, but last year a New York judge said that previous failure to enforce a right didn’t mean that right did not exist.

Though the key ruling in all this came in California, where Flo & Eddie, previously of 1960s outfit The Turtles, first went legal on the issue. And they won, giving a second case being pursued by the Recording Industry Association Of America on behalf of the majors and ABKCO a considerable boost.

Which brings us to last week’s settlement, which will see Sirius pay $210 million for past use of pre-1972 repertoire controlled by the claimants. The broadcaster will also be licensed to use the record companies’ pre-1972 catalogue until the end of 2017 when it will need to negotiate new deals.

Welcoming the settlement, the boss of the RIAA, Cary Sherman, told reporters: “This is a great step forward for all music creators. Music has tremendous value, whether it was made in 1970 or 2015. We hope others take note of this important agreement and follow Sirius XM’s example”.

The there mentioned “others” presumably means Pandora, the other big player paying to use post-1972 recordings, but not those that pre-date federal copyright protection. Sirius and Pandora, and other digital radio services, pay royalties for post-1972 repertoire via collecting society SoundExchange, paying rates set by the Copyright Royalty Board.

It’s not clear whether the labels would opt to run pre-1972 royalties through the same body. The record industry generally doesn’t like the CRB setting rates which inevitably end up, most labels believe, below market value. Though having everything running through one system is simpler, and artists get an automatic cut of the money when SoundExchange is involved.

As the messy pre-1972 debate has rumbled on, some have proposed a change to federal copyright law in the US to explicitly extend the SoundExchange system to all sound recordings still in copyright, and it remains to be seen if there are any new moves in that direction. Certainly the pre-1972 issue is far from resolved, not least because Flo & Eddie’s litigation is ongoing, and it now has class action status meaning artists and labels not covered by the RIAA’s deal will benefit if the duo ultimately prevail.

And there is also the question as to what this all means for AM/FM stations playing 1950s and 1960s tracks which, according to the Californian ruling, in theory also need to get licences from the labels to play those records, in that state at least.

If there is any chance of that, the traditional broadcasters will lead the lobby to have all federal copyright laws (and principally the only partial performing right) extended backwards to all recordings. Though the labels would in turn lobby to have a general performing right added at a federal level so that AM/FM stations would have to start paying on all output. Indeed such moves are already underway.

So, plenty still to run on the old pre-1972 thing. For a more detailed explanation of the whole quandary check this CMU trends article, currently free to access on the website.