XM Satellite Radio VS Warner and the Music Industry

Music industry representatives are trying to push the U.S. Senate committee to consider a new legislation that would force satellite radio, cable and Internet radio companies to pay much higher royalties.

XM Satellite radio and rival satellite company Sirius already pay tens of millions of dollars in royalties to to the labels, writers, and performers, while terrestrial radio(Free FM) pays nothing.

The music industry charges royalties along a continuum. The rates depend on whether the listener can possess copies of the music. Purely passive listening, or performance as it is called, as happens in free, traditional radio is at one end of the continuum. iTunes, which charges the user to download copies of the music for personal play, is at the other end.

Currently, XM and Sirius pay performance royalties, but do not pay royalties for distribution services. XM Satellite Radio currently pays more in royalties than any other single company.

Supporters of this legislation argue that satellite radio companies should pay for distribution services similar to other broadcasters. For instance, Internet radio download services pay distribution royalties for temporary downloads. On the other hand, opponents contend that the portable satellite devices are a high-tech way for consumers to record radio programming for personal use in their homes, a practice that is commonly considered a consumer fair use right.

XM representatives explain that XM subscribers have the right to record a song for themselves, from the radio for free.

“Our subscribers, just like radio listeners have done for 50 years, have the right to make a single copy of a song for themselves,� said Mr. Parsons of XM, the largest satellite radio distributor in the United States. “They don’t have the right to distribute that copy on the Internet for others.�

The Perform Act, as the bill is called for short, is sponsored by Senators Dianne Feinstein (D-California), Lindsey Graham (R-South Carolina), and majority leader Bill Frist (R-Tennessee).

XM411 and Subscribers fight back.

XM411 urges all satellite radio subscribers to write to your congressperson, to let them know that this is a “scam”. If you want to do your part in helping, here are some websites to help you locate your congressperson in regard to THE PERFORM ACT.

http://www.house.gov/writerep/
http://www.senate.gov/general/contact_information/senators_cfm.cfm