CRB: SiriusXM required to pay royalty of 15.5% of gross revenues
According to a regulatory filing, on December 14, 2017, the Copyright Royalty Board, or CRB, of the Library of Congress issued its determination regarding the royalty rate payable by SiriusXM under the statutory license covering the performance of sound recordings over the company's satellite radio service, and the making of ephemeral copies in support of such performances, for the five-year period starting January 1, 2018 and ending on December 31, 2022. Under the terms of the CRB's decision, Sirius is required to pay a royalty of 15.5% of gross revenues, subject to exclusions and adjustments, for the five year period. The rate for 2017 was 11.0%. The rates and terms permit the company to reduce the payment due each month by the percentage of transmissions of recordings that are directly licensed from copyright owners and the percentage of transmissions that comprise recordings fixed before February 15, 1972, which recordings are not subject to the Copyright Act. The revenue subject to royalty includes subscription revenue from Sirius XM's U.S. satellite digital audio radio subscribers, and advertising revenue from channels other than those channels that make only incidental performances of sound recordings. The parties have fifteen days from the December 14, 2017 determination to move for rehearing. Once the CRB has considered any rehearing motions and responses to such motions, and provided the Register of Copyrights with sixty days to review the determination for any legal error, the Librarian of Congress will publish the final determination in the Federal Register. The parties will have thirty days from that publication to appeal the decision to the U.S. Court of Appeals for the District of Columbia Circuit. "We are in the process of studying and evaluating the rates and terms announced by the Copyright Royalty Board," Sirius said. "We also expect to evaluate changes in our pricing, including the amount of our U.S. Music Royalty Fee. We anticipate that the decision will result in an increase in our aggregate royalty expense on an annual basis beginning in 2018. We are not yet able to estimate the impact on our financial statements, although the additional royalty expense could be material."