SoundExchange's lawsuit against Music Choice over royalty underpayment has been referred to the Copyright Royalty Board (CRB) for resolution. The case, originally filed in April 2019, centers on Music Choice's alleged systematic underpayment of statutory royalties for their business establishment service (BES) between 2013 and 2016.

The dispute focuses on Music Choice's allocation of fees and payments for their BES operations, which provided over 50 channels of CD-quality music to commercial establishments. According to CRB regulations, SoundExchange is entitled to 12.5% of gross revenues from these operations during the period in question.

An independent audit commissioned by SoundExchange in 2018 revealed discrepancies in Music Choice's royalty statements, leading to the lawsuit. The investigation suggested Music Choice had been underreporting gross revenues and allocating fees in ways not aligned with CRB regulations.

U.S. District Judge Reggie B. Walton has stayed the case pending the CRB's decision. A status teleconference is scheduled for June 21st, 2022, and parties must file a joint status report within 30 days of the CRB's ruling.

In related developments, SoundExchange has also initiated audits of commercial webcasters Audacy and Midwest Communications for their 2018-2020 royalty payment statements. The Copyright Royalty Board currently consists of Judge David Strickler, Judge Steve Ruwe, and interim Chief Judge Suzanne Barnett.

Music Choice has not publicly commented on the lawsuit's referral to the CRB. SoundExchange, which collected nearly $950 million in domestic non-interactive digital radio royalties in 2020, continues to pursue proper compensation for rights holders through these legal channels.

Related Articles

Previous Articles