Good news from the CRB expected soon?

This is a busy day for the investment analysts. This morning, Bear Stearns analyst Bob Peck issued a client note stating that a positive ruling from the CRB over music royalties is expected shortly.

"Our contacts in DC suggest that a positive ruling from the Copyright Royalty Board," wrote Peck.

Last month, the Copyright Royalty Board made a proposal for "preexisting subscriptions services" which I thought might give a glimpse into their line of thinking for the proceedings with Sirius and XM.

Bear Stearns is projecting the total aggregate amount for music royalties to be around 10%. That's about 7% of total revenues, and then an additional 3% in royalties for the other four industry associations, RIAA, ASCAP, BMI, and SESAC.

In August, it was disclosed in an SEC filing that Sirius and XM proposed a flat-fee rate of $1.20 for each performance made of a copyrighted sound recording. SoundExchange countered with their own per-performance rate, which conveniently works out to roughly the 8% to 23% over the rate period that they originally wanted.

The whole issue that, understandably, XM and Sirius have a problem with is that SoundExchange wants a piece of all the action. They want a percentage of total revenue, when music is only part of the entire satellite radio offering.

Peck suggests that "it is possible that music royalty rates may be calculated on a subset of subscriber revenues attributable to music, rather than total revenues." If that's the case and Sirius-XM are able to pull this off, then both Bear Stearns' - and the consensus - could have an overly conservative model.

Let's hope.