SoundExchange is back in court against Music Choice over royalties that it says never reached artists and labels. The case spent years on hold while both sides fought over how to read a payment rule. A fresh joint filing in Washington, DC, puts the dispute back in play.
The firms want about 75 days to swap proof tied to damages. After that, they plan to try a deal or bring in a mediator. No cash amount has been agreed, and the court still has to settle the key legal issue.
At issue is Music Choice's audio service for shops and other firms, known as BES. Its regular music channels also reach homes through cable and satellite TV. SoundExchange says the firm left part of its BES income out of the royalty math.
Here's where the numbers matter. BES rates were 10% for one span and rose to 12.5% for the next. Yet SoundExchange claims Music Choice paid on just part of its sales, with shared home and business channels at the heart of the dispute.
An audit by Prager Metis led to the suit in 2019. The review covered four years of payments and found alleged gaps worth millions, along with late charges. SoundExchange also claims Music Choice held back records from 2013 and used a flawed count of business channels.
Late fees could add up as well. The cited rules set a cap of 0.75% a month for older dues and 1% for later ones. SoundExchange also wants about $35,000 for the audit and seeks legal costs. Its original claim gave no total demand.
Music Choice rejects the charge. Its view is that only money from music made solely for business clients counts. SoundExchange takes the wider view, arguing that shared channels still earn income from business use and should count toward the bill.
Copyright Royalty Board judges backed that wider reading, with only a narrow carveout for certain noncash items. Music Choice took the ruling to a federal appeals panel, but the judges said they lacked the power to review it. They also found that it did not bind Music Choice.
That puts Judge Reggie B. Walton back in charge of the rule's meaning. The appeals panel left him free to decide how much weight the board's view deserves. Earlier court remarks put the cash at stake in the tens of millions.
Behind Music Choice sit major corporate investors. A court record listed Sony Group Corporation, Warner Bros. Discovery, CommScope, and Comcast as holders of stakes at or above 10%. Later corporate changes saw Warner Bros. Discovery join Paramount Skydance, while CommScope Holding Company took the Vistance Networks name.
But there's another legal snag for SoundExchange. A judge in New York tossed its separate SiriusXM royalty suit after finding that its role as a collector did not grant it the right to sue. SoundExchange appealed and alleges more than $400 million in missed dues. SiriusXM denies that claim.
That appeal has also stalled a $3.4 million case against Sonos. A federal panel has heard the SiriusXM fight but has yet to rule, leaving a live question over how far SoundExchange can go when it takes firms to court.
For context, SoundExchange handles royalty cash from services that use music under federal licenses, then pays artists and labels. The Music Choice fight tests both the way BES income gets counted and whether the collector can recover what it says went unpaid.
The firms want about 75 days to swap proof tied to damages. After that, they plan to try a deal or bring in a mediator. No cash amount has been agreed, and the court still has to settle the key legal issue.
At issue is Music Choice's audio service for shops and other firms, known as BES. Its regular music channels also reach homes through cable and satellite TV. SoundExchange says the firm left part of its BES income out of the royalty math.
Here's where the numbers matter. BES rates were 10% for one span and rose to 12.5% for the next. Yet SoundExchange claims Music Choice paid on just part of its sales, with shared home and business channels at the heart of the dispute.
An audit by Prager Metis led to the suit in 2019. The review covered four years of payments and found alleged gaps worth millions, along with late charges. SoundExchange also claims Music Choice held back records from 2013 and used a flawed count of business channels.
Late fees could add up as well. The cited rules set a cap of 0.75% a month for older dues and 1% for later ones. SoundExchange also wants about $35,000 for the audit and seeks legal costs. Its original claim gave no total demand.
Music Choice rejects the charge. Its view is that only money from music made solely for business clients counts. SoundExchange takes the wider view, arguing that shared channels still earn income from business use and should count toward the bill.
Copyright Royalty Board judges backed that wider reading, with only a narrow carveout for certain noncash items. Music Choice took the ruling to a federal appeals panel, but the judges said they lacked the power to review it. They also found that it did not bind Music Choice.
That puts Judge Reggie B. Walton back in charge of the rule's meaning. The appeals panel left him free to decide how much weight the board's view deserves. Earlier court remarks put the cash at stake in the tens of millions.
Behind Music Choice sit major corporate investors. A court record listed Sony Group Corporation, Warner Bros. Discovery, CommScope, and Comcast as holders of stakes at or above 10%. Later corporate changes saw Warner Bros. Discovery join Paramount Skydance, while CommScope Holding Company took the Vistance Networks name.
But there's another legal snag for SoundExchange. A judge in New York tossed its separate SiriusXM royalty suit after finding that its role as a collector did not grant it the right to sue. SoundExchange appealed and alleges more than $400 million in missed dues. SiriusXM denies that claim.
That appeal has also stalled a $3.4 million case against Sonos. A federal panel has heard the SiriusXM fight but has yet to rule, leaving a live question over how far SoundExchange can go when it takes firms to court.
For context, SoundExchange handles royalty cash from services that use music under federal licenses, then pays artists and labels. The Music Choice fight tests both the way BES income gets counted and whether the collector can recover what it says went unpaid.
