M Business 5th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell

Exercise 6

Navigating copyright laws is a two fold challenge for businesses. They must work to protect their own intellectual property to maintain a competitive advantage. Additionally, they must take efforts to avoid copyright infringement of works from other companies. Even unintentional use of copyrighted material can result in enormous fines.Sirius XM Holdings Inc. found this out the hard way. Sirius provides subscription satellite radio services to 26.3 million people and is currently the largest U.S. radio broadcaster based on revenue. Federal copyright laws dictate that the company is required to pay royalty fees for music it broadcasts that was created after 1972. Because federal law does not protect music created before 1972, the company freely broadcasts music from the1950s and 1960s without paying royalties to the artists. Despite following federal law, Sirius XM is engaged in legal proceedings with three major record companies and a number of artists who claim that the company violated state laws. A judge in California confirmed this, ruling that pre-1972 music is protected under state law. The task of determining which music can be legally streamed is especially problematic, especially for a provider like Sirius XM that offers satellite access to subscribers in every state. The cost of paying royalties would amount to a notable cost for the company. However, lawsuits also pose an impending risk. The variations in state and federal copyright laws create ongoing challenges for Sirius XM and other firms. As intellectual property regulation continues to evolve, businesses must exert care to research all applicable laws that relate to intellectual property. 82
How would it affect Sirius XM if access to certain music was limited for subscribers living in or driving through certain states?