This two-year battle centers on a copyright loophole: before 1972, sound recordings were not a part of copyright law. Any sound recordings created prior to the 1972 change do not get the same copyright protection that recordings post 1972 do.
However, certain states, such as California and New York, have laws set in place that protect sound recordings. SiriusXM has not paid the artists or record labels for these recordings, regardless of this state law. The lawsuit was filed in California.
For the majors, this is a huge chunk of change—the companies estimate that around 80% of the pre-1972 songs played on SiriusXM are owned by them. In addition, Sirius has stations that specifically play 40’s, 50’s, 60’s and 70’s hits. With a reach of almost 28 million subscribers, that money adds up.
The ruling comes after another lawsuit against SiriusXM; The Turtles filed a $100 million lawsuit in September 2013 after SiriusXM played their songs without their permission.
For now, record companies are optimistic. The record giants are looking at Pandora next, who also does not pay for pre-1972 sound recordings. The lawsuit brings an important topic up—the chokehold these music tech companies currently have in the industry. There is a lot of progress to be made in getting artists and labels properly compensated from these digital companies, but for now this is a decent start.