[Infowarrior] - Bill seeks music royalties for satellite downloads

Wed Apr 26 07:21:20 EDT 2006

Bill seeks music royalties for satellite downloads

By Reuters
http://news.com.com/Bill+seeks+music+royalties+for+satellite+downloads/2100-
1027_3-6065133.html

Story last modified Tue Apr 25 22:41:08 PDT 2006

A bipartisan group of lawmakers has introduced legislation that would
require satellite radio companies to compensate the music industry for
downloads, industry and congressional sources said.
The legislation, by U.S. Senators Dianne Feinstein, D-Calif., Lindsey
Graham, R-S.C., and majority leader Bill Frist, R-Tenn., is aimed at
compensating copyright holders as satellite radio services become
distribution services.

The "Perform Act," or the "Platform Equality and Remedies for Rights Holders
in Music Act of 2006," would require satellite, cable and Internet
broadcasters to pay fair market value for the performance of digital music.
Additionally, the bill would require the use of readily available and
cost-effective technological means to prevent music theft.

"The birth of the digital music place has been a boon for businesses and
consumers. However, these new technologies and business models have become
so advanced that the clear lines between a listening service and a
distribution service have been blurred," Feinstein said. "I believe that the
Perform Act would help strike a balance between fostering the development of
new technologies and ensuring that songwriters and performers continue to be
fairly compensated for their works."

Record industry executives want so-called "parity" among the different
download platforms. They argue that the new devices XM Radio is bringing to
the market that allow customers to save songs on the receivers without
paying for the download rip off the copyright holder.

"Digital sales are finally replacing physical losses," said Mitch Bainwol,
chairman and CEO of the Recording Industry Association of America, which
lobbies for the major labels. "If someone gets a distribution right without
paying for it, that blows a hole in the digital marketplace."

Warner Music Group chairman and CEO Edgar Bronfman Jr. endorsed the
legislation in testimony prepared for a hearing on the issue scheduled for
Wednesday.

"When I see a device that permits consumers to identify the specific tracks
they want from a satellite broadcast, record them and library them for
future use, I call that device an iPod and I call the satellite service
making that device available a download service," Bronfman said. "What is
clear to everyone is that these services no longer resemble and will
increasingly stray from our collective understanding of what constitutes a
traditional radio service."

The bill protects copyright holders by ensuring that "the same rules apply
to all of the satellite, cable and Internet services, which avail themselves
of a compulsory license under" the nation's copyright laws, Bronfman said.

Sirius Satellite Radio has reached deals with the major record companies
that compensate them for downloads on its S-50 receiver that allows
customers to record content, but XM has not. A pair of devices, the Pioneer
Inno and Samsung NeXus, allows customers to record programming.

XM executives contend that the devices are nothing more than a high-tech way
to record radio programming, which is protected. In XM Chairman Gary
Parsons' prepared testimony, he said that the Feinstein-Graham bill,
tentatively known as the Perform Act, will "lead to a new tax being imposed
on our subscribers."

The company already pays millions in copyright royalties to the record
companies, and said their push for a new royalty is a negotiating tactic
designed to push those rates higher. The copyright office is currently
reviewing those rates.

"The reason the recording industry is now insisting on a different standard
has nothing to do with fairness," Parsons said. "XM and the record industry
are in the middle of renegotiating their performance license. By changing
the standard now, the recording industry hopes to stack the deck in its
favor."

Bainwol denied the charge.

"Competition should be based on the offering. Their license is for a
performance, not a distribution," he said. "I was struck by the power of
their slogan: 'It's not a pod. It's a mother ship."'