Judgment in breach-of-contract and underpayment of statutory royalties lawsuit bars Slacker, Inc., and parent company LiveOne, Inc., from using statutory license
WASHINGTON, D.C. — October 18, 2022 — SoundExchange, the premier music tech organization powering the future of music, today commented on the United States District Court for the Central District of California’s decision to enter a judgment against Slacker, Inc., and its parent company LiveOne, Inc., in a suit filed by SoundExchange to recover unpaid royalties owed to performers and rights owners.
On Thursday, October 13, the court entered judgment against Slacker and LiveOne in the amount of $9.7 million for unpaid royalties due to performers and rights owners under the U.S. government’s Section 114 sound recording license. In addition, the court permanently barred Slacker and LiveOne from using the statutory license going forward.
The statutory license allows non-interactive digital music streaming services to play music in return for monthly payments at the statutory rate determined by the Copyright Royalty Board. SoundExchange collects statutory payments from more than 3,600 services and distributes monthly royalties to copyright owners, featured recording artists, and non-featured musicians and vocalists.
“SoundExchange takes our role in defending fair compensation for creators seriously. Despite a prior agreement, multiple promises, and repeated negotiations, Slacker and LiveOne failed to pay properly for the music – on which the companies built their business model,” stated Michael Huppe, President and CEO of SoundExchange. “It is regrettable that this step became necessary, but we will not back down when it comes to protecting creators and ensuring they are well-represented and properly paid under the law. We are grateful for the court’s recognition of the value proposition and this judgment in our favor.”
Background
Slacker is a digital media company that uses the statutory license to use sound recordings on digital radio. In 2017, Slacker stopped paying statutory royalties to creators whose recordings it was using. SoundExchange has been negotiating with Slacker since that time to resolve its outstanding balance, but Slacker has failed to meet the terms to which the parties agreed. In June 2022, SoundExchange filed a complaint for breach of contract and underpayment of statutory royalties in the United States District Court for the Central District of California. On October 13, 2022, SoundExchange filed a stipulated judgment with the court after negotiations with Slacker and LiveOne had broken down.
About SoundExchange:
SoundExchange is the premier music tech organization on a mission to power the future of music. It was independently formed in 2003 to build a fairer, simpler, and more efficient music industry through technology, data, and advocacy. The only organization designated by the U.S. government to administer the Section 114 sound recording license, SoundExchange collects and distributes digital performance royalties on behalf of 570,000 music creators and growing. Through proprietary music tech solutions that turn data into accurate revenue, SoundExchange has paid more than $9 billion in distributions. For more information, visit soundexchange.com.