SiriusXM Loses To Turtles

Things are about to get weird in California. As has been widely reported, the Turtles have won summary judgement against SiriusXM for the public performance of their music.

Having read the judgement, and the relevant California statutes, it’s actually not that surprising.

California is one of the very few states that creates blanket rights in sound recordings, not just rights of reproduction and distribution, and the only one I’m aware of that doesn’t explicitly carve out radio and television broadcasts. SiriusXM’s argument that the rights are meant to specify those that are “left over” from federalization likewise don’t have much teeth, since federal copyright explicitly leaves all rights intact for pre-1972 recordings.

But legal wranglings aside, this ruling is going to create a whole mess of interesting problems. Here’s why.

  • It isn’t limited to digital performances. The California statute specifies that the “author has exclusive ownership until February 15, 2047 against all persons.” This means that any copyright holder of a sound recording can sue terrestrial radio stations, restaurants, bars, and everyone else who plays a recording in a public place in California.
  • There are no statutory royalties, and no collection agencies. Even if one of those business paid SoundExchange for those recordings, they could still be sued and lose. Anyone who wants to use pre-1972 music will have to deal with the rights holders directly. And those rights holders have carte blanche to demand whatever rate they want.
  • The rights accrue entirely to the legal copyright owners. Under the federal statutes, royalties are required to be distributed between the performing artists and the legal copyright owners. There is nothing like this in the California statutes. In most cases (and especially for pre-1972 recordings), the legal copyright holder is the record label, not the artist. They would receive 100% of any payments made, and since those payments didn’t exist when the recording contracts were written, they would be under no contractual obligation to pay out on them. It’s extraordinarily unlikely that any money would actually reach performing artists at all.
  • ASCAP and BMI can no longer guarantee the legality of their pre-1972 catalog. The freedom from copyright lawsuits is the impetus for licensing from them, and they can no longer guarantee that. Will they still attempt to license those recordings? Will licensees be able to refuse, on the grounds that ASCAP and BMI have nothing to offer? Will those PRO’s give a discount if people don’t want to pay for songs when they get absolutely no safety from lawsuits?

Given how money-hungry the major labels are, I’m shocked that nobody has sued the California terrestrial radio stations (and the rest). But I’m betting they’re going to start suing everyone now. And if they do, then expect a huge number of California businesses to suddenly stop playing oldies.

Naturally, SiriusXM is going to appeal. But either way, every business that uses music is going to descend on California in an attempt to change the statutes. And every rights holder trade group is also going to descend on California in an attempt to keep them the same. It’s going to be a lobbying frenzy.

Either that, or the push for full federalization is going to get into high gear. That would actually be the best option of all.

Whatever the case, it’s going to be a bumpy ride.

Update: I’ve uploaded a PDF version of the ruling:
240691364-Flo-Eddie-v-Sirius-XM-Order-on-MSJ

Update 2: Thanks to Les from Rock Around The Web, we can now look at all the court documents for this case:
http://www.plainsite.org/dockets/u7mejfw4/california-central-district-court/flo-and-eddie-inc-v-sirius-xm-radio-inc-et-al/

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