Here's some more gory details on the suit against XM Satellite Radio by the Record Industry. This suit does not just affect XM, and not even just SIRIUS indirectly (with their new wearable coming out soon, there's no doubt it will have recording capabilities), but jeapordizes all consumer electronic devices that can receive and record a broadcast of any sort (such as DVRs).
If you would like to view the actual filing, you can access it here (PDF - 33 pages).
Make no mistake, this is an attempt by the RIAA to change XM Radio's music license structure from performance (which terrestrial radio is privvy to) to a distribution license (like iTunes or Napster). In the lawsuit, the RIAA completely ignores the Audio Home Recording Act, even though that is exactly what XM designed the Pioneer Inno and Samsung Helix to be in compliance with. The AHRA specifically gives users of digital audio recorders the right to engage in home taping.
But the RIAA ignores the AHRA here. Why? Because 14 years after the AHRA was passed, the RIAA feels that with our evolving technology the AHRA no longer suits their interests. Hence the backing of The PERFORM Act.
According to several sources, XM offered the RIAA payments similar to the agreement made with Sirius, and in fact offered more compensation. But the RIAA didn't want this because it sets a precidence of a la carte device settlements. Yet another reason why Sirius isn't necessarily out of hot water yet. Should the RIAA be successful with this suit, and let's all hope they're not, they will be able to define the scope of a "distribution" right as any service that transmits and allows the recording of a broadcast. That means that not just satellite radio, but terrestrial radio and internet radio would all be at risk.
Ridiculous.
So what about the alleged damages? We've all heard that the RIAA is seeking $150,000 for EACH song saved by the Inno - but with 160,000 songs played per month - how exactly will the RIAA track these occurances? In the suit, they claim that XM has the capability to track each saved song through the XM+Napster interface. As soon as the Inno is plugged into the computer, it is "believed" that XM can then receive a transmission over the internet indicating that a specific song is saved.
But it doesn't stop there.
Because of the Helix/Inno ability to automatically buffer up to 10 minutes into a broadcast, the RIAA feels that those "recordings" are infringements as well. So XM should pay them for the cached music occurances as well. As the EFF points out, if half the Inno users are simply tuned in to XM's music content (not actively recording mind you, just listening to), the statutory damages would reach $37.5 Billion a year. Yeah... wait, what?! That obviously has no bearing on the "harm suffered" by the RIAA considering they pulled in $12.3 Billion last year.
The Inno does not allow transferring of the music off the device. It even allows you to buy the music you've recorded and protects the music with DRM that deletes the songs if you are no longer an XM subscribers. So how can these only be used for anything other than the facilitation of personal use?
[EFF.org via Public Knowledge]
I think I will have to do what I did in the 80's. Go to radio shack, splice my speaker output and splice it into a tapedeck in my car. Not quite digital, but you get the picture.
The RIAA is looking to set a standard but at what expense? If the RIAA knew that XM was releasing this product why didn't they step up and facilitate an agreement with XM?... Like wise for XM. This sort of thing puts a bad taste in my mouth towards buying or even enjoying the music I have. I just bought the Pioneer Inno and I feel like all the joy is sucked out of the purchase by the RIAA's & XM's lack of ability to make their behind the scenes interaction seamless to the consumer. Instead they have dragged all of us into their problem; what does this lawsuit mean for Inno owners? Sad... Sad.
Legally XM is going to lose.
there is a substantive difference between free broadcast, and a fee based subscription service. regular broadcast makes their money from advertising and has no financial interest in "personal" recordings of their broadcasts. on the other hand, XM's fee based service makes money by allowing their users to record their songs, and is using the service to compete with other services and technologies like like itunes/ipod that are paying master royalties to the copyright holders. with XM, the only way to hear your "personal recording" is to keep paying the monthly fee. and it's important to note the copyrights holders only receive royalties the song’s original broadcast. so monies collected by XM from users who want to listen to their play lists of personal records go straight XM and the copyright holders don't see a dime (as far as i understand the accounting model).
in truth, i think the legal flaw is that you have to keep paying the subscription fee to hear the recordings. That clearly takes this out of the realm of “personal.” if in fact, you could own the recordings for personal use, put it on your computer, or burn a CD, I think the AHRA might offer the protection XM needs. but since the recordings are in effect owned by XM, and "rented" to the listeners, I don't see how XM can not call what they are doing distribution and not get licenses from the labels.
The word “record” is really not even accurate. In essence, XM is transfering the data to a personal hand-held device which then offers personalized broadcasts of the material at the users requests. And the AHRA doesn’t protect XM in this regard.
Another dimension to this is "personal recordings" are counter-productive to the free broadcast model as listener don't need to tune in to hear music they've recorded. Since radio charges ad fees based on the number of listeners, they would prefer people listen in, and not record. Where for XM the opposite is true. For XM, they only pay the statutory royalties when they broadcast the song. Once it’s “recorded,” they don’t pay a thing to the copyright holder, nor does the listener.
In theory, it would be legal for XM to in one bulk session broadcast every song in their library, and record it their devices, and never again pay royalties.
Excellent article about XM satellite radio because it
is the future of satellite radio communications.
Excellent article about XM satellite radio because it
is the future of satellite radio communications.