Satellite radio service SiriusXM has agreed to settle a series of copyright lawsuits filed against the company for playing songs recorded prior to 1972 without compensating the owners of the rights to those songs. The lawsuits were class action filings on behalf of The Turtles, the 1960s pop rock band best known for its classic no. 1 hit song "Happy Together."
Turtles' Lawsuits Settled
The lawsuits filed in three states, New York, Florida and California, argue that owners of the rights to recordings made before 1972 are entitled to royalties under an unclear copyright statute enacted in 1972, which specifically granted royalty payments to rights holders of songs composed after that year, but was silent on how prior recordings should be treated.
The suits were filed by Flo & Eddie Inc. — a company run by Mark Volman and Howard Kaylan of the Turtles. The Turtles had several years of chart success in the late 1960s, and although "Happy Together" has proven to be their most enduring hit, they had other top charting songs including "She'd Rather Be With Me," "She's My Girl," "Elenore" and "You Showed Me," which was successfully rerecorded by female rap group Salt-n-Pepa in 1990.
SiriusXM settled the case in California, with a complicated series of payout possibilities that maxes out at $99 million, depending on the outcome of pending appeals in the Florida and New York cases. The agreement covers the past period of time during which SiriusXM has been playing the pre-1972 recordings without paying royalties to rights holders, and also covers licensing fees for the next 10 years.
SiriusXM On A Roll
Fortunately for SiriusXM, the company is on a roll recently, having surpassed earnings expectations in Q3 2016 and estimating it will be adding an impressive 1.7 million net new subscribers to its ledger by year's end, amounting to a total of well over 31 million subscribers.
SiriusXM is of course home to Howard Stern, who is arguably its biggest draw, and reportedly earns almost the maximum amount of the settlement, with sources pegging the radio host's annual salary at $90 million. The company has been promoting its streaming only internet service separate from its satellite radio offerings, and is also planning to launch an innovative new video streaming app in conjunction with Stern in 2017.
While Stern's show is not affected by the settlement, SiriusXM hosts numerous music channels which play songs from the pre-1972 era, including dedicated stations which exclusively play the music of each decade, beginning with the tunes of the 1940s: "40's Junction", "50s on 5", "60s on 6" and "70s on 7." The Turtles have a similar case pending against Pandora, which has not yet been resolved.
