Universal Music Group Charges XM for Recording Feature

Although the record labels get paid a percentage of satellite radio revenue in return for allowing their songs to be played over the air, the major labels want to get paid again when users record their songs onto XM Satellite Radio’s portable Inno players, so, of course, they sued. Yesterday, however, Universal Music Group became […]

Extortion
Although the record labels get paid a percentage of satellite radio revenue in return for allowing their songs to be played over the air, the major labels want to get paid again when users record their songs onto XM Satellite Radio's portable Inno players, so, of course, they sued. Yesterday, however, Universal Music Group became the first label to drop the suit, after signing a multi-year deal that allows XM users to record their songs.

The terms of the deal were not disclosed, but the fact that XM had to fork over any money at all in order to include the recording feature is preposterous. The Inno devices do not allow songs to be uploaded from their internal flash memory and onto a computer. Do the labels envision consumers purchasing hundreds of Inno players, using each one as a sort of mix tape? It's hard to believe the judge has yet to dismiss the case.

The CEOs of both companies included polite statements in the press release, so hopefully the deal was made for a pittance:

Doug Morris, CEO of UMG:

"We are pleased to have resolved this situation in anamicable manner. We pride ourselves on empowering new technology andexpanding consumer choice. And XM is providing a new and excitingopportunity for music lovers around the world to discover and enjoy ourcontent, while at the same time recognizing the intrinsic value ofmusic to their business and the need to respect the rights of contentowners."

Nate Davis president and CEO of XM:

"Our agreement is a win for everyone involved, especiallyfor consumers. Today's announcement underscores the fact that XM
competes in an audio entertainment market in which consumers have moreoptions than ever. We commend UMG for being the first music company totake this step forward with us and look forward to continuing ourdiscussions with our other partners in the music industry."

(image from m-w)