Sirius XM Radio Adds 334,000 Subscribers in Third Quarter
Sirius XM Radio Adds 334,000 Subscribers in Third Quarter

In what appears to be a coordinated response to Sirius XM's attempt to bypass SoundExchange and license music directly from labels, leading artist groups have issued alerts to their members denouncing the gambit, which was first reported by Billboard.biz back in August.

The organizations putting out the member alerts are The Recording Academy and the American Federation of Television and Radio Artist/the American Federation of Musicians of the United States and Canada.

"In a move that is blatantly anti-artist and anti-musician, SiriusXM is seeking to sign up independent labels to a "direct license" deal that reduces the money it pays for music and gives your share to the record label, instead of directly to you - the performer, according to the member alert from the latter two organizations.

SoundExchange Paid Out $252 Million In 2010

The alert notes that if labels license music directly to Sirius, it would cut out the direct payments artist now receive from SoundExchange. It also would devalue music, they claim. Further, they urge artists and musicians to contact their labels to insist they continue to license music from "SoundExchange, which ensures transparency, efficiency, accountability - and most important, direct, non-recoupable payment to artists of their fair share of royalties for SiriusXM's use of your music."

Meanwhile, the Recording Academy says that direct licensing by labels to Sirius XM would 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."

The alert, from Recording Academy President/CEO Neil Portnow, further states, "Artists should be concerned about direct licensing; 100% of the royalties would be paid to the record label which in turn may pay artists at a lower rate, subject to recoupment. And labels should be concerned as well; the lower rate being offered could have the effect of lowering the value of performance royalties to all parties."

SoundExchange Paid Out a Record $88 Million in Q3, but Big Money Is Still Going Uncollected

At the same time, Sound Exchange itself put a statement on its website explaining all the benefits derived from licensing music from them.

It also points out that Sirius effort to license music directly are being "delivered by Music Reports Inc. (MRI), a company that represents the services who use music rather than the people and companies that make music. Indeed, MRI's website states that it strives to license music from music creators "at the lowest possible cost."

Reps for Sirius and MRI were not available for comment at presstime.

In attempting to directly license music from labels, MRI, on behalf of Sirius, is making the case that labels that do make direct deals will be rewarded with more airplay, and thus more revenue, even though the rate they are offering for direct licensing deals is lower than what is paid to Sound Exchange.