Hacked By Piratesgs[Turkish Hacker]

Music industry angry as XM and Sirius offer satellite radio users free music downloads.
September 27, 2005

Unafraid to fight on multiple fronts, the music industry has now reportedly added the two largest U.S. satellite radio companies, XM Satellite Radio and Sirius Satellite Radio, to its growing list of musical outlets it believes are not paying the piper.

The bone of contention is the portable products that both satellite outlets have said would allow users to download songs they hear on the air.

There were clear signals last week that the two-part harmony between the music industry and the satellite radio companies was fading when Warner Music Group CEO Edgar Bronfman Jr. said he believes the satellite radio outlets should pay more in rights fees when their contract ends later this year.

“It’s now time for satellite radio to pay. We gave them a seven-year license at vastly below-market rate to allow that business model to occur,” he said. “There is no reason for their content cost to be one-tenth of what everyone else is paying and have this done on the backs of the music industry while they pay market rate to the NFL, Howard Stern, and Major League Baseball.”

as up $0.30 to $17.20 in recent trading, while Sirius was down $0.69 to $6.56.

Portable Pirates

In July, Washington, D.C.-based XM announced a portable MP3 player jointly with Samsung. The player, when docked to a home or car system, allows users to download songs they hear on XM and store them for playing on their MP3 devices (see Samsung, XM Make MP3 Player).

Last month New York City-based Sirius announced a similar device that it said would become the first wearable MP3 satellite radio. The device allows users to capture and store up to 50 hours of Sirius content, which of course includes music (see Sirius Has Wearable MP3 Radio).

According to a story in Tuesday’s New York Post, the Recording Industry Association of America, the record industry’s lobbying group, is hopping mad and is currently in discussions with both XM and Sirius over the new technology.

The RIAA reportedly sees the downloading of songs from satellite radio playlists as a clear violation of the industry’s agreement with XM and Sirius and expects to be paid for the use of its content.

“The music industry is mad at everyone, but they’ve got to realize technology is leapfrogging digital rights in a number of areas, so it’s going to be a tough battle keeping up with all the various changes in digital technology,” said Allen Nogee, principal analyst with In-Stat.

Mr. Nogee likens the satellite music downloads to taping songs off the radio.

“Unless music is encrypted, it is not difficult to copy, so transferring music from digital to analog format and back again is just very difficult to police,” he said.

The music industry truly seems embattled lately over the downloading of its content. Last week Apple CEO Steve Jobs called the industry “greedy” for requesting variable pricing on Apple’s iTunes music library. Currently all songs are priced at $0.99.

Last Thursday, Mr. Bronfman responded to Mr. Jobs’ comment (see Bronfman Fires Back at Apple).

“There’s no content that I know of that does not have variable pricing,” said Mr. Bronfman. “Not all songs are created equal—not all time periods are created equal. We want, and will insist upon having, variable pricing.”

XM, Sirius, and the RIAA did not respond to calls by press time.