Clutching Forks and Knives to Eat Their Bacon: Sirius now wants to gut SoundExchange

“Have you seen the bigger piggies
In their starched white shirts
You will find the bigger piggies
Stirring up the dirt
Always have clean shirts to
play around in.

In their sties with all their backing
They don’t care what goes on around

In their eyes there’s something lacking
What they need’s a damn good whacking.

Everywhere there’s lots of piggies
Living piggy lives…
Clutching forks and knives to eat their bacon.”

Piggies by George Harrison.

An important Billboard article announces that SiriusXM is trying to get labels to do direct deals outside of SoundExchange

We will have more on this to come but realize that there’s an evil game afoot here–actually several.

First, the rate that Sirius has to pay for their radio service is about to go up as part of a government rate setting.  If they can show that there are market deals in place by decieving labels into thinking they can make more money by avoiding SoundExchange’s expense charges–which are closely monitored by the way through the SoundExchange independent board including artist representatives–then Sirius can take those deals into the government rate setting agency to get everyone’s rates lowered.

Second, carefully note this part of the article:  “As part of its move to direct licensing, SiriusXM will pay the full royalty rate directly to the labels, as opposed to the way SoundExchange makes payments, splitting royalties evenly between the artist, which it pays directly, and the label. So labels that directly license their masters to Sirius would then be responsible for paying the artist royalty. MRI would provide a full accounting on a per song basis to labels.”

Let’s put that “paying the artist royalty” concept into focus:  In the world of royalty accounting, the term “payment” rarely occurs.  It is more common to speak of “credits” and “debits” as most artist accounts are unrecouped most of the time.  So instead of allowing the artist to make SoundExchange monies on a direct payment (like the writer’s share of performance money from the societies like ASCAP and BMI)–that is, on a non-recoupment basis–SiriusXM is hoping to tease the labels into a severe artist relations problem now that Sirius is making a pile of cash.

Not only is SiriusXM seeking to screw the artists, they would also be screwing the background singers and musicians who get 5% of these monies.  (The AFM/AFTRA trust funds are separate from the unions and pay through their monies to the background singers and musicians.)

Now ask yourself what kind of person would dream up this scheme?

I have two words for this one:

Oink Oink.

See also “Will Artists Lose Royalties from Satellite Radio?”