SoundExchange sues Sonos and Napster over millions in unpaid music royalties
SoundExchange is taking legal action after audit revealed Sonos had missed considerable royalty payments.
US collective rights organisation (CRO), SoundExchange is taking legal action against Sonos and Napster, alleging they owe over $3.4 million in unpaid royalties. The dispute centres around Sonos Radio, a non-interactive music streaming service that launched in 2020 and was powered by Napster until 2023.
According to a complaint filed in a California federal court, SoundExchange says that royalty payments from Sonos Radio began to dry up in May 2022. This coincided with Napster being bought by two blockchain-focused firms, Hivemind and Algorand. Since that acquisition, the financial reporting and payments to SoundExchange reportedly stopped altogether.
An audit carried out by SoundExchange in 2023 discovered major gaps in the royalty reporting and payments for Sonos Radio. In its lawsuit, the organisation states: “Sonos and its agent Napster have failed to pay at least $3,423,844.41 comprising royalties owed for the period October 2022 to April 2023, interest, late fees, and auditor fee-shifting costs, and subtracting Sonos and Napster’s payments made to date. Late fees and interest continue to grow.”
As CMU reports, Napster had been responsible for handling the licensing relationship with SoundExchange while powering Sonos Radio. For the first two years, this arrangement ran smoothly. But the 2022 acquisition brought major disruption. The specific employee at Napster who was in charge of reporting to SoundExchange reportedly left shortly after the acquisition, and was never replaced. This resulted in a breakdown in communication and no further payments being made.
Although Napster was operating the backend of the service, SoundExchange is placing ultimate responsibility on Sonos. The lawsuit argues that Sonos Radio is still “owned and operated” by Sonos and that the company is therefore “ultimately responsible for ensuring compliance” with the SoundExchange licence and the “payment of royalties”.
After parting ways with Napster in 2023, Sonos partnered with Deezer to power its streaming service instead. Since then, royalty payments have reportedly returned to normal. However, the money still owed from the Napster era remains unresolved, leading to the legal action.
This isn’t the end of Napster’s corporate changes either. In March 2025, the company was sold once again, this time to Infinite Reality.
This lawsuit highlights how tech changes and shifting ownership can disrupt royalty payments. With over $3 million at stake, SoundExchange is holding Sonos accountable.