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Some People (like the RIAA) Never Learn

The Recording Industry Association of America has made a long career out of opposing new ways to market its product. It didn't like tape, or 8-track tape (no loss there), or DAT, or taping off the radio; it really didn't like CDs, and we've seen their recent reaction to Napster. Reproducibility is their enemy; digital their nemesis-until-death. Not only has this been foolish, it's usually been a losing battle. Bringing criminal charges against the occasional downloader is just liable to make people more eager to avoid paying the companies in the first place.

Now, they're at it again, this time with satellite radio (subscription required). I don't subscribe to XM or Sirius, but apparently, they're now offering the equivalent of subscribe-pods, which let users record and store songs, delete ones they don't like, and then even replay them in "shuffle" mode. Two caveats: users can't transfer the songs to other media, and they have to keep subscribing to the service to keep listening to their downloaded music.

The RIAA is all in a tizzy, claiming that this is recording of songs, and that since their royalty rates are lower for broadcast or streaming than for purchase, they're getting cheated. My guess is that they're not fully valuing that ongoing revenue stream. Remember, I have to keep paying that monthly fee to listen to what I've downloaded.

I don't think XM and Sirius are even arguing on principle here (although they're certainly arguing about higher royalty fees):

XM's new device, the Nexus, won't be out until early next year, but analysts expect strong sales. The Nexus has many similar functions to the Sirius receiver, and also allows users to purchase better-quality recordings of the songs they like through a partnership with Napster Inc. If the listener purchases a song individually, it can be transferred to other devices such as computers.

There. The satellite companies are treating purchase differently from download. If they're in a partnership with Napster, then the record labels will certainly see the purchase royalties from those sales.

The RIAA's traditional obstreperousness is becomes even more evident when you look at their further objections:

Though portable, the new receivers must be placed in a docking station to receive satellite-radio signals -- one more reason that record labels tag them as recording devices. They also can store music from sources other than satellite-radio broadcasts; for example, users can move playlists from their computers to the new players, though they can't transfer music captured from the radio to other devices.

The new receivers need to be plugged in to receive signal, so that makes them even more of a recorder. Only under the RIAA's twisted logic would a black hole that can receive but not broadcast, and which needs to be at a docking station to work, be more of a threat than a simple digital recorder.


I may have misunderstood but you made the comment that "...their royalty rates are lower for broadcast or streaming than for purchase..." In fact the satellite service pay higher royalty rates than terrestrial broadcasters.

Yes, but they both pay lower royalty fees than for sales.

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