Michael Huppe: It's Time for SiriusXM to Get Serious About Paying Music Creators (Guest Op-Ed)

Charlie Gross
Michael Huppe

SoundExchange's CEO talks licensing reform and the CLASSICS Act.

A promising occurrence is unfolding in the U.S. Congress: bipartisan agreement on meaningful legislation. Republicans and Democrats on Capitol Hill are working on a broad and impactful measure to modernize and improve many of the rules that govern how music is used in the digital era. This bipartisan consensus will benefit music creators, digital services and fans.

This situation has progressed in large measure because the music industry and digital service providers -- often divided -- similarly worked together to craft a unified package of reforms. More than 20 organizations representing artists, songwriters, composers, record labels, music publishers, performance rights organizations and streaming services (such as Pandora) support these bills and are asking Congress to pass them as part of a unified piece of music legislation in 2018. SoundExchange endorses this package, in line with our ongoing efforts to make our country's music licensing system more just for everyone.

There is, unfortunately, one significant naysayer: SiriusXM. In advertisements and recent statements by the company, SiriusXM says that the legislation should be rejected because it fails to address a glaring inequity in our public policy: that broadcast radio does not pay performers for the use of their sound recordings, while SiriusXM does.

SiriusXM is right about broadcast radio. This system is unfair. Broadcast radio should absolutely compensate creators of sound recordings. For far too long, terrestrial (FM) radio has used the music of hard working artists to attract listeners to their stations, while paying those artists nothing for their work.

But this is not a reason to abandon an industry wide agreement on legislation addressing other important issues. The existence of one law that cheats creators should not derail our collective efforts to fix other laws which likewise keep creators down. We should fix the problems we can -- when we can -- while continuing to fight all of the challenges facing songwriters and performers. Winning this battle does not mean surrender on all other issues. In fact, the same 20 organizations behind the legislation also stand united in rejecting this "free ride" by radio, seeking to fix this outside of the current legislative package.

So why is SiriusXM joining the FM radio performance fight now? A cynic might view SiriusXM's sudden interest as a ploy to undermine the legislative package which the clear majority of the industry and tech companies support. After all, part of the package (the CLASSICS Act) would finally require Sirius to pay for the use of pre-1972 recordings under Federal Law. As SiriusXM knows too well, current federal law governing the digital use of sound recordings has an enormous loophole which SiriusXM relied on to stop paying artists who recorded prior to 1972. SiriusXM only began paying those artists after multiple lawsuits compelled them into settlements. While the settlements allowed some artists to get paid for their music (SoundExchange managed the distribution of these artist payments) they offer only a temporary fix. The underlying public policy defect (which currently favors SiriusXM) can only be addressed by Federal legislation. The CLASSICS Act, part of the legislative package, closes this loophole once and for all.

While getting FM radio to pay for the music they use is not part of this legislative package, that does not mean it's a dead issue. The musicFIRST coalition continues to pursue a terrestrial radio performance right through direct talks with radio broadcasters represented by the NAB. We are hopeful that the music industry and radio broadcasters can resolve their differences, and that we can craft an agreement to pay artists for their work on radio as we have with virtually every other platform. But this issue is not yet ripe for legislation, and should not hold back the progress that we can otherwise make through the hard work of these 20+ music groups.

The fact is both SiriusXM and broadcast radio enjoy sweetheart deals from the government consummated at the expense of creators. We have an opportunity to roll back some of these government subsidies as part of the current legislative package while we continue to press on others. Two wrongs do not make a right -- nor do they provide SiriusXM with an excuse to attack the CLASSICS Act and unravel the progress which the music industry, digital service providers and Congress have created in the current legislation. This legislation does not address every inequity facing music creators, but it's an important step on the journey towards treating all creators fairly -- across all platforms. And it's progress.

We urge Congress to move quickly and decisively to turn the unity package into law.

Michael Huppe is the president and CEO of SoundExchange.