[Infowarrior] - RIAA freaks out over XM device (again, I think)

[Richard Forno]

Record Labels Sue XM Satellite Over Device
http://tinyurl.com/ofxjc

By TED BRIDIS, Associated Press WriterTue May 16, 7:02 PM ET

The recording industry sued XM Satellite Radio on Tuesday over its new
iPod-like device that can store up to 50 hours of music, sending to the
courts a roiling dispute over how consumers can legally record songs using
next-generation radio services.

The federal lawsuit, filed in New York by the largest labels, accuses XM
Satellite of "massive wholesale infringement" because its $400 handheld
"Inno" device can record hours of music and automatically parse recordings
by song and artist. The device is sold under the slogan, "Hear it, click it,
save it."

The lawsuit seeks $150,000 in damages for every song copied by XM Satellite
customers using the devices, which went on sale weeks ago. The company said
it plays 160,000 different songs every month.

The lawsuit does not seek directly any payments from or sanctions against XM
Satellite customers who record songs. But if the lawsuit were successful, it
could raise the company's costs, which could be passed on to subscribers as
higher monthly fees.

XM Satellite said Tuesday it will fight the lawsuit and accused the labels
of using the courts as leverage during business negotiations.

"These are legal devices that allow consumers to listen to and record radio
just as the law has allowed for decades," the company said in a statement.
"The music labels are trying to stifle innovation, limit consumer choice and
roll back consumers' rights to record content for their personal use."

XM Satellite has balked at the industry's efforts to collect expensive
distribution licenses similar to those required for Internet downloading
services, such as Apple Inc.'s iTunes. Its chief rival, Sirius Satellite
Radio Inc., has already agreed to pay for such licenses to cover similar
gadgets for its service.

XM Satellite's chairman, Gary Parsons, previously said requiring such
licenses ‹ in addition to broader performance licenses the company already
pays ‹ would represent "a new tax being imposed on our subscribers."

XM Satellite has compared its new device to a high-tech videocassette
recorder, which consumers can legally use to record programs for their
personal use. It also noted that songs stored on the device from its
broadcasts can't be copied and can only be played for as long as a customer
subscribes to its service.

The head of the music industry's trade group said the XM Satellite device is
legally indistinguishable from iPods and other portable music players that
work with downloading services.

"Yahoo!, Rhapsody, iTunes and Napster all have licenses," said Mitch
Bainwol, chief executive for the Recording Industry Association of America.
"There's no reason XM shouldn't as well."

XM subscribers pay $12.95 per month to listen to more than 170 channels of
entertainment, sports and news programs, including 69 channels of different
music genres without commercials.

A Washington-based consumers group, Public Knowledge, said the lawsuit
threatens the rights of listeners to record music for their own use.

"The shame of the legal action, however, is that this is really a dispute
between XM and the recording industry over licensing fees," the group's
president, Gigi Sohn, said in a statement. "The companies should be left to
figure out a solution without interference from the courts or from
Congress."

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On the Net:

XM Satellite: http://www.xmradio.com

Recording Industry Association of America: http://www.riaa.com