MP3 Newswire has a great article on the ongoing negotiations between XM and SIRIUS with the RIAA. If you remember, the RIAA recently has objected to the upcoming MP3/Satellite Radio devices like the Sirius S50, Samsung neXus and now the Dell DJ Satellite. Not only that, but the RIAA has also mentioned raising the licensing fees (as much as a $1 billion?) for both XM and SIRIUS when their contract expires next year.
What negotiation chips do SIRIUS and XM have in this case? The article covers some interesting thoughts: Satellite Radio can simply play the radio-card, claiming they need to be treated like AM/FM (who get music for notoriously cheap rates). Still, both XM and SIRIUS can’t really survive without the RIAA - 80s channels are nothing without 80s music - so the RIAA has the upper-hand in this case.
Should negotiations go into arbitration, and they probably will, the result will have an effect on both listeners, and Wall Street. Advice to the RIAA: tread lightly - you need us just as much as we need you.
Leave a comment