SiriusXM CEO Jim Meyer: The CLASSICS Act Is Seriously Flawed (Guest Column)
SiriusXM has paid $2.2 billion for its use of post-1972 recordings; terrestrial radio has paid "nothing."
Once again, lawmakers are proposing to give terrestrial radio another unfair advantage. We’ve seen this show before. With the introduction of The CLASSICS (Compensating Legacy Artists for their Songs, Service & Important Contributions to Society) Act in the Senate, terrestrial radio, a $15 billion industry, has set the stage to tilt the playing field in its favor while, at the same time, taking advantage of hardworking artists.
Under current federal law, no public performance right exists for sound recordings created prior to February 15, 1972. The reasons for the distinction Congress made between pre- and post-1972 recordings in the Sound Recording Act of 1971 are lost. However, a distinction was made by Congress and, as a result, satellite and internet radio broadcasters fully comply with federal law by paying royalties for their use of post-1972 sound recordings. That statutory license also includes a carve-out for works not covered by federal law and SiriusXM has availed itself of that deduction, like any business accountable to stockholders would.
Congress is now taking a seriously flawed approach to address the situation it created in 1971 by creating a new royalty scheme in which “digital audio services” will pay performance royalties on pre-1972 sound recordings. In the CLASSICS Act, Congress creates another senseless distinction. The CLASSICS Act does not “primarily affect” digital audio services, it only affects digital audio services. Congress has again specifically exempted terrestrial radio from any payment obligation to the artists that the CLASSICS Act purports to champion.
SiriusXM has been, and hopes to always be, clear about its position -- all artists should be compensated by all users of sound recordings under federal law. Indeed, since the birth of satellite radio, SiriusXM has paid SoundExchange over $2.2 billion dollars for distribution to artists and record labels. What we oppose is the massive subsidy that the CLASSICS Act gives to terrestrial radio -- the industry that has benefited the most and longest from the efforts of working artists. During the same period that SiriusXM paid $2.2 billion for its use of post-72 works, terrestrial radio paid them nothing. If Congress truly wants to correct an unfairness in the Copyright Act, terrestrial radio should be subject to the CLASSICS Act just like satellite and internet radio.
Unlike other digital audio services that support the CLASSICS Act, SiriusXM has also already paid the record industry over $235 million dollars for historic and future uses of pre-1972 recordings. Rather than continue to litigate state law issues, years ago SiriusXM reached agreements with major and independent labels. No other digital audio service has taken that approach. The CLASSICS Act fails to fully credit SiriusXM for those settlement agreements.
Let’s not kid ourselves, this act isn’t about digital audio services -- all radio, whether AM, FM, satellite or Internet is digital -- and it isn't about protecting family-run stations or religious or college broadcasters; it is about protecting a handful of major terrestrial radio companies. Rather than giving the behemoth terrestrial radio industry yet another advantage at the expense of innovative technologies, artists and record labels, Congress should enable the full compensation of artists and their families under the CLASSICS Act.
James E. Meyer
Chief Executive Officer
SiriusXM Radio Inc.
James E. Meyer has been CEO of SiriusXM since 2012, and is a director on the Board of Pandora Media Inc.