Sirius-XM facing “massive” royalties bill

A long-forgotten pop group, The Turtles and their 1967 hit Happy Together, is the reason why US pay-radio operator could face Court-awarded penalties running into many millions of dollars.

The band is still very much around and nowadays led by vocalists Howard Kaylan and Mark Volman, and the pair started a Class Action against Sirius-XM alleging that Sirius-XM had not paid them for broadcasting performance rights to their old tunes, and were thus guilty of copyright infringement.

The situation is complex, but in essence Sirius-XM has depended on US Federal Law which exempts them from paying royalties on pre-1972 recordings. The Class Action challenged this position, and May 27th saw the latest episode of a long-running series of court hearings with a US District judge certify that the plaintiff’s action could progress. The musicians had previously won summary judgement last September, but that ruling was appealed by Sirius-XM.

Judge Philip Gutierrez, in allowing the Class Action to proceed, is also opening up a floodgate of potential costs against Sirius-XM. “Sirius XM treats every single owner of a pre-1972 song the same, namely it doesn’t pay them, so it was appropriate for this court to grant class certification,” said Henry Gradstein, attorney for Flo & Eddie Inc, a company controlled by founding Turtles members Howard Kaylan and Mark Volman, and reported by Reuters.

Also under threat are music download sites Pandora and Spotify. The pre-1972 recordings are not covered by Federal copyright law, but some musicians have succeeded in gaining payments by using individual claims by using State (as distinct to Federal) laws.

The Turtles are seeking $100 million from Sirius-XM for alleged infringements. But this could be the tip of a very large iceberg.