Record labels sue XM Radio for selling music

Music labels sued XM Satellite Radio Inc. in New York District Court on Tuesday for infringing their copyright by allowing subscribers to record songs.

XM Satellite Radio is infringing the copyright of music labels by allowing its subscribers to record songs, according to a lawsuit filed Tuesday by the Recording Industry Association of America (RIAA).

Music fans who subscribe to XM Radio and own an Inno recorder from Pioneer can use the cell phone-size device to listen to satellite radio broadcasts, record songs, then replay them as MP3 files.

On Tuesday, the RIAA said XM was committing "massive wholesale infringement" of copyright sound recordings, and asked the court to stop XM's broadcasts and award it damage payments.

By allowing listeners to record MP3 files, XM is acting as a competitor to legal online music stores such as Apple's iTunes, Napster and Rhapsody, the RIAA said. The suit was filed in the U.S. District Court for the Southern District of New York.

In fact, XM Radio is marketing the Inno as an alternative to the Apple iPod, using the advertising phrase "It's not the pod, it's the mothership."

The RIAA is an industry group that includes major music labels such as Atlantic Recording, Capitol Records, Motown Record, Sony BMG Music Entertainment, Virgin Records American and Warner Bros. Recording.

Its members deny they are opposed to satellite radio in general. "We celebrate the growth of XM and Sirius. We think the downloading capability of XM's Inno is attractive and appealing -- it just needs to be licensed," the RIAA said in a statement.

A spokesman for XM Radio did not respond to requests for comment for this story.

Listeners have been able to legally record songs off commercial, analog radio stations for years.

The RIAA says this is different because the broadcast is digital, so XM subscribers can scan through a broadcast and record only certain songs.

They can store a lot. The Inno's 1G byte of storage can hold about 50 hours of music, or 1,000 songs. As future devices deliver greater memory, that storage capacity could easily swell to 10,000 songs, said the RIAA.

In fact, retailers have been selling Pioneer's US$400 Inno since March, and XM is already promoting new devices, such as Samsung's Helix.

At that rate, the RIAA fears no one will ever buy music from the labels again.

"Because XM makes available vast catalogues of music in every genre, subscribers will have little need ever again to buy legitimate copies of plaintiffs' sound recordings," the RIAA said.

That would be a lot of listeners. XM currently broadcasts 170 channels of music to 6 million U.S. subscribers, each paying a subscription fee of about US$12.95 per month. XM projects that its subscriber base will reach 9 million by the end of 2006.

In its lawsuit, RIAA says that XM already has the ability to stop the practice. XM currently embeds software code in its encrypted satellite transmissions that deletes saved songs if a user stops paying his XM subscription fee. RIAA says XM could use that same code to prevent users from recording certain songs.

This lawsuit is similar to one that the RIAA brought against XM's rival, Sirius Satellite Radio. In that case, Sirius agreed to make it harder for listeners to record specific songs on its S50, a handheld satellite radio similar in size and price to the Inno.

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Ben Ames

IDG News Service
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