SoundExchange sues Slacker and parent company LiveOne over unpaid royalties to creators – Music Business Worldwide

US performance rights organization SoundExchange has sued Slacker, Inc. and parent company LiveOne in the US over unpaid royalties owed to performers and rights owners.

Music platform Slacker offers both free and subscription-based access to licensed songs via music stations. The platform also has partnerships with various car manufacturers including Tesla.

In the lawsuit, filed in California Central District Court on Tuesday (June 28), SoundExchange claims that Slacker stopped paying statutory royalties to creators in 2017.

Slacker Radio was acquired by LiveXLive Media (now LiveOne) for $50 million in September 2017,  five months after the company was forced to lay off 25% of its global staff.

Slacker was rebranded as ‘LiveXLive powered by Slacker’ in 2019, with LiveXLive rebranding as LiveOne in 2021.

SoundExchange says that it has been in negotiations with Slacker since 2017 to resolve the outstanding balance, but claims that Slacker has “failed to meet the terms to which the parties agreed”.

SoundExchange has now filed a complaint for breach of contract and underpayment of statutory royalties.

The lawsuit against Slacker arrived on the same day that parent company LiveOne published its financial results the firm’s fiscal Q4 2022 (Calendar Q1 2022), as well as its FY fiscal 2022 (ended March 31, 2022).

For LiveOne’s fiscal year 2022 the company’s revenue increased 79% year-over-year to  $117 million, compared to $65.2 million in the prior year.

In a statement issued alongside the company’s financial results yesterday (June 28), LiveOne’s CEO and Chairman, Robert Ellin, stated that the company expects its Slacker Radio and PodcastOne divisions “to collectively achieve revenue in excess of $80 million in Fiscal 2023″.

Commenting on LiveOne’s results yesterday (June 28) Ellin stated: “The momentum in LiveOne’s audio business, which includes Slacker Radio and PodcastOne, continues to improve as a result of continued growth of paid members, through partnerships, including Tesla, as well as an increase in advertising and sponsorships.

“We currently expect those two subsidiaries to collectively achieve revenue in excess of $80 million in Fiscal 2023.”

“By refusing to pay royalties for the use of protected sound recordings, Slacker and LiveOne have directly harmed creators over the years.”

Michael Huppe, SoundExchange

Michael Huppe, President and CEO of SoundExchange, said: “By refusing to pay royalties for the use of protected sound recordings, Slacker and LiveOne have directly harmed creators over the years.

“Today, SoundExchange is taking a stand through necessary legal action to protect the value of music and ensure creators are compensated fairly for their work.

“We hope Slacker and LiveOne will promptly reverse course and pay what they owe for the use of recordings that drive the value of their service.”Music Business Worldwide