As satellite radio continues to grow in popularity, the RIAA believes it should get a 30% slice of the pie
Sirius Chief Financial Officer David Frear believes that satellite radio companies (i.e. Sirius and XM) shouldn't be obliged to have to pay higher royalties to record companies -- but the RIAA feels that it should get 30% of the revenues. Sirius and XM both already pay royalty fees to record companies so both companies are able to play copyrighted music over the radio. Both parties have until June 30, 2006, to reach an agreement, or an arbitrator will then be called in to help settle the case.
"There's been some tough talk from some of the labels," he said. Record labels haven't been happy with Sirius's new S50 radio which includes an MP3 player that allows users to record several hours of programming. The music industry insists that because of this "interactive" service, which is entitled to higher fees, satellite radio companies should have to step up and pay more.
Considering XM and Sirius have already spend billions on the infrastructure alone, high royalties like the ones proposed could cripple (contentwise and financially) either company overnight.
“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads
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