RIAA Takes On XM Over Copyright Infringement

Satellite radios are a relatively new thing in the world of digital technology. With a system that receives a signal, it is no surprise that someone would eventually create a device to record the information of that signal.

Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes

Satellite radio companies XM and Sirius are attracting unwanted attention by the Recording Industry Association of America (RIAA) for allowing listeners to record and store songs. RIAA executives claim that this activity is a blatant copyright violation.

The RIAA has been holding discussions with XM and Sirius about the devices that allow such activity. This could become the next target for the RIAA.

“It could become a game of chicken — who’s going to blink first?” said a record company executive.

The devices are reportedly to be released on schedule this fall. Last week, the RIAA reportedly discussed the issue on its weekly conference call with representatives of the four major music companies. A separate call was held solely to discuss the issues surrounding XM and Sirius’ portable devices just shortly after.

In late July, XM announced a partnership with Samsung to produce a portable device that allows users to record songs from satellite radio broadcasts and then catalog and save favored songs while deleting others.

Sirius later announced a similar device, called the S50. The device will be about the size of an iPod and released in October.

The music industry argues the recording capability — essentially Tivo for radio — is a clear copyright violation and could take revenue away from paid download music stores, such as iTunes. One executive argued the devices give users “permanent ownership of copyrighted material without paying for it.”

XM has a deal with the paid service Napster, which allows user to click and buy songs they hear on satellite radio broadcasts. The deal was welcomed by the industry, yet raises the question, one music executive said, “Why would anyone use the Napster platform to buy it if XM is giving it away for free?”

Some record executives expect an ugly battle if XM and Sirius don’t modify the devices.

“They can’t do this without being sued,” said another music executive involved in the discussions.

The rupture over the portable devices comes as the music industry is gearing up to demand higher licensing fees from the satellite radio industry once the current seven-year contract expires at the end of the year.

The current contract is for below market rates — a deal that “essentially financed satellite radio’s introduction and gave them a seven-year license at vastly below market rates in order to allow that business model to occur,” said Edgar Bronfman Jr., chairman and CEO of Warner Music.

Bronfman’s comments came in response to a statement from Sirius chief Mel Karmazin, who said he expected the pricing issue to ultimately be decided by arbitration.

Drew Wilson on Twitter: @icecube85 and Google+.

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