Music Publishers Sue XM Radio Over "Downloads"

[Damion Chaplin]

<div class='os_post_top_link'><a href='http://arstechnica.com/news.ars/post/20070323-music-publishers-sue-xm-radio-over-downloads.html' target='_blank'>http://arstechnica.com/news.ars/post/20070323-music-publishers-sue-xm-radio-over-downloads.html</a><br /><br /></div><i>"XM Radio now has another headache. In addition to getting skeptical federal regulators to sign off on their merger with Sirius, the satellite radio operator was sued yesterday by a group of music publishers. The National Music Publishers' Association announced the lawsuit yesterday, accusing XM Radio of not compensating songwriters and publishers for music recorded by its subscribers. At issue are XM Radio players that have the capability to record music broadcast over the satellite service. The availability of devices like the Samsung Helix means that XM Radio is no longer just a satellite radio company, according to the NMPA. The fact that its subscribers can record music and listen to it again means that the company is operating an "unauthorized digital download service.""</i><br /><br />I don't really peruse P2P sharing sites, so someone will have to correct me if I'm wrong, but I just can't imagine that people are recording songs with their sattelite receivers and then sharing it online. Certainly not in the epidemic proportions that would warrant litigation like this. It comes down to the fact that the Music Industry is either unable or unwilling to adapt to modern technologies and thus must sue to shield themselves from the scary unknown. :roll:

[Felix Torres]

The issue here isn't piracy at all.
You can't get the recorded content off these players, anyway.
Rather it is a more mundane contractual/licensng kind of dispute.

What seems to be happening is that music for radio broadcast is licensed at a certain rate (very low, fractions of a cent per song), whereas music for user-controlled listening (to coin a term) is licensed at a somewhat higher rate of pennies per song.

In other words, Rhapsody/Urge/Napster pay more per song streamed than an internet radio station or a traditional over-the-air broadcaster. By allowing customers to record music on their players, XM is facilitating (even encouraging!!! :wink: ) customers to repeatedly listen to songs they like, which means their service is closer to the user-controlled playlists of the more expensive services, but they are paying the lower rate. Can't have that. Not when they'll need to renegotiate with the other guys sooner or later.

Just another example of the many ways the studios' business model is broken. :-)

Fact is, this *is* a slippery slope.
Traditionally, users had no control over what they hear on radio; the dj builds the playlist and the user is a passive consumer of the stream, like it or not.
To control what they listen to, they had to "buy" those songs.
(Notice how on personalized internet radio you can't specify specific songs and artists? Only styles, genres, etc?)
With digital audio subscriptions, consumers acquire varying degrees of control over their playlists and the licensing model says that the more end-user control, the higher the rate, cause the higher the control, the closer to user gets to "owning" the song.
Of course, users have never actually *bought* songs, they merely buy *listening rights* encapsulated in a piece of vynil, plastic, or low-grade DRM'ed file.

XM's "crime" is giving customers more control than they are licensed to provide. :oops:

Cablevision just lost a similar case:
http://news.com.com/Cablevision+loses+networked-based+DVR+case/2100-1036_3-6170025.html?tag=ne.fd.mnbc

The TV Studios (successfully, for now) argued that storing recorded shows on servers for latter viewing amounted to retransmitting/rebroadcasting content and that Cablevision didn't have a license for that.

Studios are fighting a thousand such rear guard wars as digital media technology evolves towards its innevitable end-point of ubiquitous, cheap, ala carte consumption of content. Sooner or later, technology *will* drag'em, kicking and screaming like a two-year-old on a tantrum, into the 21st century. But until they can find a way to live with the new technologies we'll keep seeing these lawsuits against their own distribution channels.

Life is tough when your business model is broken and falling into pieces, isn't it?

[whydidnt]

However, this is different than the Cablevision case because XM isn't storing the songs on their servers. I would argue that this is protected "fair use" in that these players simply allow their owners to time-shift the songs, much like we used to do with cassette players, and can legally do with VCR's and
DVR's. XM is not re-broadcasting the content.

This is, simply put, another money grab by an industry that completely refuses to acknowledge the market for it's products has changed.

[Felix Torres]

However, this is different than the Cablevision case because XM isn't storing the songs on their servers. I would argue that this is protected "fair use" in that these players simply allow their owners to time-shift the songs, much like we used to do with cassette players, and can legally do with VCR's and
DVR's. XM is not re-broadcasting the content.

This is, simply put, another money grab by an industry that completely refuses to acknowledge the market for it's products has changed.

Well, yes; its different.
They haven't lost the case yet. ;-)

I'm sorry if I wasn't clear; the similarity of the cases isn't in *what* the two are doing with their licensed content, but rather that both are doing (or proposing to do) *something* that turns their product into something different that they're not licensed to provide.

Cablevision is licensed to transmit content at its regularly scheduled day and time; what they proposed was interpreted by the judge as being equivalent to video on demand re-transmission service; something they are not licensed for.

XM is being sued for delivering devices that allow consumers to capture content and build local playlists. Not unlike what Rhapsody et al are licensed to do. The nuts-n-bolts are different but the plaintiffs claim the end result is similar enough to be considered a download service. And XM is licensed as a broadcaster not a download service.

I'm not arguing the merits of the cases or whether *we* the consumers would have fair use rights to cobble up a solution like either service on our own. I'm merely pointing out that the cases are *not* totally without merit; it is a gray area, insofar as the businesses offering these extensions could conceivable be exceeding the bounds of their licensing contracts. Unlike other digital media lawsuits, these have real meat to them and, regardless of who wins or loses, *will* change the bounds of what is and isn't permissible for a *business* to do.

Dunno 'bout you, but *I* find it interesting to watch the various players dance around the minefield of digital media licensing. Realistically, *nobody* knows where we are heading and it is most likely that at some point Congress will end up enacting legislation clarifying the rights of consumers, providers, and intermediaries.

But until that happens, its going to be ugly...

[whydidnt]

Dunno 'bout you, but *I* find it interesting to watch the various players dance around the minefield of digital media licensing. Realistically, *nobody* knows where we are heading and it is most likely that at some point Congress will end up enacting legislation clarifying the rights of consumers, providers, and intermediaries.


Actually, I'm of the opinion congress has already decided. The Audio Home Recording Act of 1992 specifically allows consumers to make digital recordings for non-commercial use - http://en.wikipedia.org/wiki/Audio_Home_Recording_Act

I don't know if XM is paying the royalties mentioned in the Act, but if they are, then it would seem they have done everything required under law to satisfy the various recording industry groups. -- If you were to say recording the music is not the primary function of the device, but receiving it is, then I suppose they wouldn't even need to pay that royalty. That I suppose could be subject to litigation, however. Without question, is the fact that any recordings made are not for commercial use, as defined by the act.

It seems to me that XM has produced a very closed system that A) provides a very limited amount of storage, truly meant to time-shift content and B) Cannot be digitally copied, unlike most music services such as Raphsody or Yahoo!, etc. I would say they made a good faith effort to try not to be a music download service, but rather to provide a way for their customers to enjoy the same time shift recording privileges that are provided by standard over-the-air broadcasts.

[flooder]

My biggest complaint is that this will mean that the ability to record is taking it away.

I have one of these units and I don't think I have ever recorded music with it.

I often record talk shows as I am driving or in the office. You never know when the phone is going to ring and interrupt the program you are listening to. Or the wife drags you into the mall when the Red Sox are tied in the eighth inning.

[Felix Torres]

It seems to me that XM has produced a very closed system that A) provides a very limited amount of storage, truly meant to time-shift content and B) Cannot be digitally copied, unlike most music services such as Raphsody or Yahoo!, etc. I would say they made a good faith effort to try not to be a music download service, but rather to provide a way for their customers to enjoy the same time shift recording privileges that are provided by standard over-the-air broadcasts.

They seem to think they're in the right or the debate wouldn't have gotten this far. But Cablevision thought they were in the right, too.
Sometimes even reasonable folks disagree enough to need a third party to arbitrate.
It would probably be good for consumers if XM prevailed but there's no guarantee. The courts have been known to screw up, from time to time. :-)