Satellite Radio Gets Off Easy

getawayThe Copyright Royalty Board just finalized the new royalty rates that satellite radio providers will pay for the next 5 years.

Under the terms of the CRB Satellite Radio Services, XM will pay a performance license rate of 6.0% of those gross revenues subject to the fees for 2007 and 2008, 6.5% for 2009, 7.0% for 2010, 7.5% for 2011 and 8.0% for 2012.

This seems like a pretty sweet deal for XM and Sirius, with a modest rate increase over 6 years. Gary Parsens, chairman of XM radio seems pretty ecstatic over the decision:

“Moreover, the music performance fees set by the CRB are in the range projected by many financial analysts who cover this industry.”

Now, while satellite radio isn’t a money printing enterprise, it sure as hell has a lot more revenue generation going on for it than internet radio. OEM partnerships with a multitude of automobile manufacturers, portable devices, aftermarket add-ons for existing automobiles, internet subscriptions, the list goes on. Would someone care to explain to me how on earth the CRB decided the internet radio royalty increases were the least bit fair in light of this? Not only is the CRB/SoundExchange imposing a higher royalty rate on internet radio, they aren’t even offering the option of a revenue-based royalty payment scheme.

wat.

Read more [money.cnn.com]

About Andy Yen