Thursday, September 12, 2013

Record Labels Sue Sirius XM Over the Use of Older Music

BEN SISARIO/The New York Times

Pop music is full of famous dates: Feb. 9, 1964, when the Beatles first appeared on “The Ed Sullivan Show.” Aug. 1, 1981, MTV’s on-air debut.

Another, Feb. 15, 1972 — when federal copyright protection began to apply to recordings — has less recognition. But a recent string of lawsuits argue that licensing issues tied to that date may be worth hundreds of millions of dollars to singers and record labels. If the suits are successful, they could also bring a headache of liability to satellite and Internet radio services.

On Wednesday, the three largest record companies — Sony, Universal and Warner, along with ABKCO, an independent that controls many of the Rolling Stones’ early music rights — sued Sirius XM Radio in a California court, saying that the satellite service used recordings from before 1972 without permission. Even though federal copyright protection does not apply to these recordings, the suits say that they are still covered by state law.

The suit is the third major complaint filed against Sirius XM in five weeks. The band the Turtles — whose song “Happy Together” was a No. 1 hit in 1967 — and the royalty agency SoundExchange filed similar suits last month, each seeking as much as $100 million in damages. The suit filed on Wednesday, in Los Angeles Superior Court, seeks unspecified damages and a declaratory judgment about the rights involved in pre-1972 recordings.

“It is disgraceful, unfair, and probably criminal that Sirius XM is stealing monies due to me and other performing artists,” the singer Judy Collins said in a statement. “Performers should be paid their fair share of the royalties from their songs.”

Among other artists mentioned in the suit are the Beatles, the Rolling Stones, Frank Sinatra and the Supremes.

A spokesman for Sirius XM declined to comment.

The suits against Sirius could have a broad impact in digital music. Pandora, which like Sirius relies on the compulsory licensing provisions of federal copyright law, could be affected. But lawyers and music executives said the cases would probably not have an impact on Spotify and other on-demand services, which tend to strike all-encompassing licensing deals with labels.

Terrestrial radio broadcasters pay royalties only to music publishers, which control songwriting copyrights; digital services must also pay for use of recordings.

Sirius XM, the only satellite radio service in the United States, has 25 million subscribers who pay $14.49 or more a month. Last year, the company had $3.4 billion in revenue and paid 8 percent of its gross revenue in royalties to record companies and performers, according to its annual report. SoundExchange, whose suit accused Sirius XM of improper accounting of royalties, estimated that oldies make up 10 to 15 percent of all the airplay on the satellite service.

The legal argument behind the major labels’ suit differs little from the one being made in the Turtles’ case, but it underscores the importance of the issue to the music industry. The Turtles’ suit has applied for class-action status, which could take months to establish. By filing their own suit, the industry’s biggest powers are looking to control the issue on their own terms and get a ruling as quickly as possible.

The issue of licensing for recordings before 1972 has been mostly untested in courts. Lawyers and music executives say that the new suits are a response to questions that have arisen in other recent cases, and also to new terms established for satellite radio by the Copyright Royalty Board, a panel of federal judges that regulates some forms of licensing.

Jonathan B. Sokol, a lawyer who often represents music companies in copyright cases, said that the suits may face difficulty proving a public performance right for recordings under law. For one thing, he noted, that would implicate many other businesses that may have licenses with music publishers, which control songwriting rights, but not record labels.

“The problem is that anybody that has rights to a master recording could come after anybody engaging in public performance — any bar, restaurant, sports stadium,” said Mr. Sokol, who is not involved in the Sirius suits.

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