SoundExchange and Music Choice have proposed phased discovery and settlement talks after their dispute over royalties for Music Choice’s business subscription service returned to district court. The case turns on which revenue counts toward royalties owed under the statutory license.
SoundExchange sued in April 2019, alleging underpayments from 2013 through 2016. It said a multiyear audit by Prager Metis found that Music Choice had systematically underpaid royalties. SoundExchange also alleged that Music Choice refused to provide information about its 2013 activities during the audit.
The parties disagree over the meaning of “gross proceeds” in the relevant statute. SoundExchange argues that Music Choice excluded business-service revenue associated with channels and recordings also offered through its nonbusiness subscription. Music Choice appealed after the Copyright Royalty Board (CRB) largely sided with SoundExchange in a December 2024 ruling.
The district judge had referred the issue to the CRB in December 2021. In August, the appellate court returned the case to the district court on jurisdictional grounds.
Both parties now propose about 75 days of damages discovery, followed by settlement discussions or mediation. Under their proposed schedule, those talks would conclude by early March.
In a separate royalty dispute involving SiriusXM, a federal judge granted SiriusXM’s motion to dismiss SoundExchange’s case, finding that SoundExchange had no private right of action under the relevant Copyright Act provision. That decision is on appeal, while other royalty actions remain on hold.
