Yesterday the record industry filed suit against XM Satellite Radio for "massive wholesale infringement," caused by the Samsung Helix and Pioneer Inno. The suit seeks $150,000 in "damages" for every song copied by XM customers using the device. How exactly the RIAA intends to track each occurance of a saved song is a mystery. But with 6.5 million subscribers, and approximately 160,000 songs played every month, the potential damages that the RIAA could seek out would be staggering (however no where realistic).

XM issued the following statement to Billboard Radio Monitor:

"These are legal devices that allow consumers to listen to and record radio just as the law has allowed for decades. The music labels are trying to stifle innovation, limit consumer choice and roll back consumers’ rights to record content for their personal use. This is a negotiating tactic on the part of the industry to gain an advantage in our private business discussions. XM Radio is the largest single payer of digital music broadcast royalties, and royalties paid by XM go to the music industry and benefit artists directly. XM will vigorously defend this lawsuit on behalf of consumers."

And the RIAA fired back stating the following:

"Not only are we fans of satellite radio, we consider ourselves partners and we celebrate the industry’s growth," the RIAA said in the statement. "From the outset, we understood the mutual benefits of digital broadcasts. In fact, we provided them with a major price break in our initial licensing agreement to help the industry get off the ground. That agreement has made it possible for satellite radio to grow.

"As we continue to transform our business model, the integrity of the digital marketplace is more important than ever. We want to work with our various partners to offer fans an extraordinary music experience in a variety of different ways, but everyone must play by the same set of rules and fairly compensate labels, artists, songwriters and publishers."

With XM being the biggest single payer of digital music broadcast royalties, they're playing by a very generous set of rules. SIRIUS can't be far behind XM in the amount of royalities they pay either. Both companies are being strongarmed by the RIAA cartel.

Remember that last month SIRIUS settled with the four major music labels (Universal, Warner, Song BMG and EMI Music Group), agreeing to pay an undisclosed amount in 'damages' and cap the production of the Sirius S50.

In a statement to the US Senate over The Perform Act - which essentially is the RIAA's method of bringing Washington into the negotiation - Gary Parsons, Chairman of XM Satellite Radio said, "Recording from the radio is not a download service. Everything recorded from the radio is locked to the device. It cannot be transferred to the Internet ensuring that it is only for personal use."

Back in October 2005, we learned that the RIAA was seeking $1 Billion from both XM and SIRIUS for the new music licensing contracts covering 2007 - 2012. The current $80 Million contract expires this year. Talk about disgusting negotiation tactics. Terrestrial radio, on the otherhand, does not pay a single dime.

[Reuters]
[Billboard Radio Monitor]

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