SiriusXM Stock Sinks On Royalty Rate Hike, Celebs Boycott Bannon

SiriusXM’s stock price (SIRI) took a hit late last week following the news that the U.S. Copyright Royalty Board was raising the rate the satellite radio broadcaster must pay for music on its 100-plus channels by 40 percent.

YouTube – Steve Bannon

Effective Jan. 1, SiriusXM must now pay 15 percent of its revenue, as opposed to the previous 11 percent. That revenue according to financial reports is in the $5 billion range annually.

The rate increase is seen as a victory by content creators and those who represent them. “We thank the CRB for its work and appreciate their consideration of the case we laid out,” SoundExchange President and CEO Michael Huppe said. “SoundExchange is dedicated to our mission of ensuring that creators are properly recognized and compensated for the use of their work. And while the Copyright Royalty Board did not adopt the rates we proposed for Sirius XM, its ruling demonstrates an important step in the right direction toward valuing the contributions of the music creators represented by SoundExchange.”

SoundExchange collects and distributes digital performance royalties on behalf of more than 155,000 recording artists and master rights owners.

While SiriusXM got hit with an increase, the CRB reduced the rates for Music Choice’s and Muzak’s services from 8.5 percent to 7.5 percent.

SiriusXM stock has been on an upward trajectory for the year, with shares up about 20 percent since January.

Despite a good day for Wall Street on Friday, SIRI stock was knocked down about 5 percent with extremely high activity.

As services like Spotify and Sirius become ever more mainstream and profitable, rights holders like SoundExchange have urged Congress to establish rate standard parity so all digital services are subject to a “willing buyer/willing seller” standard.

“There’s no reason recording artists and record labels should subsidize a company as profitable as Sirius XM,” Huppe said. “Everyone should play by the same rules, and it is long past time for Congress to change the standard that currently forces music creators to subsidize flourishing companies whose success is built on top of the music.”

The rate increase comes after celebrities and musicians such as Melissa Etheridge and actors Seth Rogen and John Leguizamo announced plans to boycott SiriusXM with the news that Breitbart founder and former Donald Trump chief strategist Steve Bannon would be part of a Breitbart news program airing on the network’s “Patriot” channel.

Etheridge tweeted that she would discontinue hosting her “Melissa’s Basement” interview program on the subscription radio network because of it:

<blockquote class=”twitter-tweet” data-lang=”en”><p lang=”en” dir=”ltr”>After news that <a href=”https://twitter.com/SIRIUSXM?ref_src=twsrc%5Etfw”>@SIRIUSXM</a> has given <a href=”https://twitter.com/hashtag/SteveBannon?src=hash&ref_src=twsrc%5Etfw”>#SteveBannon</a> a show, I can no longer in good conscience be a part of my show <a href=”https://twitter.com/siriusxmvolume?ref_src=twsrc%5Etfw”>@siriusxmvolume</a> <a href=”https://twitter.com/hashtag/speaktrue?src=hash&ref_src=twsrc%5Etfw”>#speaktrue</a></p>— Melissa Etheridge (@metheridge) <a href=”https://twitter.com/metheridge/status/939337300491800576?ref_src=twsrc%5Etfw”>December 9, 2017</a></blockquote>

SiriusXM features influential content and earlier this year announced a Beatles Channel featuring hosts including Pearl Jam’s Eddie Vedder, Don Henley, film director Ron Howard, and Billy Joel. In its third quarter financials, the company said self-pay net subscribers had reached approximately 27 million.