Satellite radio has grown tremendously in recent years, but the growth may pose a problem for major music labels. While satellite-based music streams are a core service offered by both XM and Sirius, the emergence of new devices that allow users to store content for later playback could eat into the sales of CDs or paid downloads.
Such devices have been on the market for some time, but the industry has been heavily focused on upcoming receivers like the Sirius S50, which hit retailers in 2006. The S50 allows listeners to store up to 50 hours of content for playback later, a feature that could cannibalize purchases of CDs or paid downloads. Meanwhile, the ability to record digital (HD) radio streams is also a concern for the Recording Industry Association of America (RIAA) and has led to multiple flare-ups with the Consumer Electronics Association (CEA) over the past few years.
In an attempt to limit various recording and time-shifting capabilities, the RIAA and various other music agencies have been pushing new bills on Capitol Hill. Most recently, the RIAA backed the “HD Radio Content Protection Act of 2005,” which aims to limit the amount of content that can be stored on both satellite and digital radio receivers, as well as how stored content can be accessed. According to Gigi Sohn, president of Public Knowledge, this would undermine existing personal usage rights as outlined in the Audio Home Recording Act.
In recent congressional testimony before the House Judiciary Committee Subcommittee on Courts, the Internet and Intellectual Property, Sohn noted that the proposed radio content protection legislation permits the Federal Communications Commission (FCC) to extinguish the long-protected consumer right, guaranteed by the Audio Home Recording Act, to record transmissions for personal use. For the satellite industry, recording limitations on devices like the S50 would minimize the company’s competitiveness with the iPod, both on the dashboard and on-the-go.
The issue is not only limited to satellite radio, as terrestrial radio stations also broadcast digital streams that can be recorded and stored for later playback. This has caused concern for music labels as they fear that listeners will simply record songs from the radio instead of purchasing them.
However, companies like XM and Sirius argue that recording and time-shifting capabilities are essential features that differentiate them from traditional radio and music services. They also claim that the ability to record and store content is a key selling point for their devices, as it allows users to access their favorite content at their convenience.
In response to the RIAA’s concerns, XM and Sirius have implemented various measures to limit the amount of content that can be stored on their devices. For example, XM’s Inno device only allows users to store up to 25 hours of content, while Sirius’ Stiletto 100 device limits storage to 100 hours of content.
Ultimately, the issue of recording and time-shifting capabilities in the satellite radio industry is a complex one that involves the interests of music labels, satellite radio companies, and consumers. While music labels are concerned about losing sales to recorded streams, satellite radio companies argue that these features are essential to their service and their competitiveness with other music services like the iPod.
As the industry continues to evolve, it remains to be seen how the issue will be resolved. However, it is clear that any legislation aimed at limiting the recording and time-shifting capabilities of satellite radio devices will have significant implications for the industry as a whole.