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Music Industry Faces Tough Negotiations In Digital Music-Licensing Frontier
Howard Stern and Oprah Winfrey might have lent some serious star power to subscription-based satellite-radio networks XM and Sirius, but that doesn't mean the fledgling medium is ready for prime time. This year, XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc. have to renegotiate their royalty agreements with record labels. Not only is the music industry intent on raising the licensing fees, it wants to stop the introduction of new satellite radio receivers that work more like an iPod than a radio.
Because the new device would let subscribers record 5 or more hours of programming and organize their own playlists, the music industry wants a bigger cut. The labels get far less for songs played on satellite radio than for music purchased through download services or on CDs. 'It's an example of a new medium that does not fit very neatly in a copyright bucket,' says Silicon Valley attorney Michael Glaser, a partner at Perkins Coie in Menlo Park, CA. 'But this is a field that is changing so rapidly that stakeholders can't wait for Congress to make up the rules.'
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