By Andrew Orlowski in San Francisco for The
Register.
This article has been reproduced with permission.
This isn't exactly new, as anyone who grew up with a radio
cassette player, and peeling "Home Taping Is Killing Music"
stickers off vinyl album sleeves knows. But the digital version of
these battles has finally broken out this week, with the latest
RIAA lawsuit targeting a US satellite radio company.
As we wrote several months ago, a loophole exists that means the
rights holder receives no recording royalty on a stream that has
instantly been transformed into a recording. Nor did they receive
anything from the cassette mix tapes you made. But the tentative
introduction of radios that record streams as discrete digital
files this year in the United States has brought the rights holders
out swinging.
A few months ago we reported how Universal's digital boss Larry
Kenswill – when he wasn't getting Slashdot mixed up
with Digg – singled out Samsung and Pioneer for
particular attention. Samsung's Helix player and Pioneer's Inno
player – the latter was launched in January and marketed by XM
Radio as the XM2go under the slogan "It's not a Pod. It's the
mothership" – are the catalyst for the $26bn lawsuit.
The Inno looks like a large iPod with an antenna, stores 50
hours of music, doubles as an FM radio, and allows you to create
playlists. At $399, it's well priced, and points the way to what an
iPod should be.
The RIAA is suing for the maximum penalty for infringement:
$150,000 per song, which adds up: XM has 6.5 million listeners and
broadcasts 160,000 songs a month. The lawsuit charges XM with
copyright infringement, unauthorized digital delivery, reproduction
infringement and unfair competition.
Not every XM radio subscriber has an Inno, however, and the
RIAA's claim that XM listeners "will have little need ever again to
buy legitimate copies of plaintiffs' sound recordings" is fanciful,
given the sound quality of the broadcasts.
XM denounced the lawsuit as a bargaining tactic, which of course
it is, and vowed to fight it. XM's only satellite radio rival
Sirius settled with the rights holder earlier this spring. XM will
surely follow. In addition to being backed by GM and Honda, founder
investor ClearChannel rubs along just fine with the RIAA.
Over in Europe, terrestrial digital radio or DAB is now
mainstream, although manufacturers have been tentative about
building technology that allows it to fulfill its true
potential.
Most digital radios allow you to rewind, but few allow you to
record, or to juggle the recordings around. The Wayne
Hemingway-designed Bug receiver allowed you to do both, and also
move the recording to an SD card. A hard disk version of the Bug
has yet to appear, and popular models only permit a buffer large
enough to permit only a few minutes of the broadcast to be rewound.
And as with US satellite radio, the sound quality is considerably
less than promised.
How will the other consumer electronics manufacturers react?
The pace setter is obviously Apple. Apple doesn't really care
what fills its iPods, so long as there's plenty of content around
to keep them filled. It's an open secret in the music business that
the company has its eyes on integrating digital radio broadcasts
into iTunes, folding them seamlessly into a Music Store that
already time shifts terrestrial radio, in the shape of
podcasts.
Apple has simply been waiting for the price of receivers to
fall, and watching to see who takes the bullet first. Now we know
that's XM.
But the Inno and the iPod have more similarities than might
first be apparent – and more than either manufacturer would
care to admit. Depending on how you look at it, it's either dumbed
down or "optimized" to be a viewer and player. If you want to
create a playlist, you need to attach it to a smart host, such as a
PC.
And on closer examination this "Mothership" is also hindered in
other ways. As the manual plainly states in a footnote:
*XM content cannot be exported from
the inno digital audio player. If you wish to own a complete,
high-fidelity version of digital content on demand, you should
purchase content from XM+Napster. This may allow you to store the
content on multiple devices depending upon the digital rights
management of such content.
Hardly the threat to civilization the RIAA portrays, then. If
the RIAA succeeds in limiting the capabilities of the Inno and
devices like it, that suits Apple just fine. As executives have
explained many times, the iTunes Music Store exists to fuel demand
for the iPod, and demand for the iPod fuels demand for Apple
computers. You don't hear so much about the latter now that half of
Apple's revenues are earned from the music player, but the computer
business is the more lucrative in terms of revenue and margins, and
it should be the more enduring now the painful transitions to Mac
OS X and Intel are almost complete.
The distinction between stream and file no longer makes sense,
and a blanket licensing regime – of the kind that allowed
radio to flourish in the first place – is the only sensible
option. However, thanks to the selfish collusion of the RIAA and
the market leader Apple, we're likely to see several years of
crippled technology instead.
Don't touch that dial!
© The Register
2006
