Dow Jones – 03-01-06:

Sirius Chief Financial Officer David Frear said he feels satellite radio companies shouldn’t have to pay music labels anything in royalties while labels feel they should get something like 30% of revenue.

Sirius, like rival XM Satellite Radio Holdings Inc. (XMSR), currently pays relatively low fees to record companies for the right to play music. Unlike broadcast services, which pay compulsory rates, satellite radio companies must negotiate their own rates.

And to clarify something, satellite radio is not exactly raking in the cash…

The company (Sirius) lost $311.4 million compared with a loss of $261.9 million in the same period a year ago.

But this shouldn’t be surprising, if the RIAA thinks it can get blood from 14 year old girls and little old ladies who don’t own computers, bleeding satellite radio dry should be a no-brainer!

  1. Joe D. says:

    Another great reason to hate the RIAA.

  2. Chris Swett says:

    Of course if I were the arbitrator, I’d give the RIAA 30% of Sirius’ PROFITS. Then Sirius could do to the RIAA what the labels do to artists when they cook the books.

  3. gquaglia says:

    Can’t blame the RIAA cockiness. So far they have gotten just about everything they want. They have congress in their pocket, they have gotten file swapping networks shut down, they have sued and collected thousands from the average joe, and they have gotten millions of consumers to be confortable with DRM! Right on RIAA, you should be the model on how to screw everyone and still make millions.

  4. jasontheodd says:

    I don’t need anymore reasons to hate the RIAA or the MPIAA. But the insist on giving me a new reason each and every day. It’s like a bonus. Service like that, I tell ya, isn’t this country great.

  5. Mike Voice says:

    And don’t forget how they were requiring web-casters to pay royalties higher than radio was required to pay. B#strd$!

  6. It does sound like yet another RIAA excess.

    In my opinion, satellite radio will, at best, succeed marginally, if it manages to hang on at all. People aren’t used to paying $15-$20 monthly fees to listen to the radio.

    If the RIAA has its way, satellite radio subscription costs will increase or there will have to be commercials. Cable TV channels (which used to be called “pay TV”) were commercial-free when they started — that was the inducement to subscribe. Once they were well established, that changed.

    I think that podcasting is more likely to become the medium of choice for those who want more variety in their audio programming than is currenty available on AM or FM radio. Podcasting is free and it offers time-shifting as well. And many new cars seem to be equipped with iPod or MP3 friendly sound systems.

  7. Mike Drips says:

    Would someone please nuke the RIAA? I have 2 satellite radio subscriptions and once you’ve tried it, you don’t want to go back.

    As for podcasting instead of satellite radio? Satellite radio gives you 100+ channels of music, news and other entertainment. Podcasting with its usual content of techno BS doesn’t compete at all. it’s like blogging: it reminds me of a bunch of dogs just sniffing each other’s butts.

  8. gquaglia says:

    “I think that podcasting is more likely to become the medium of choice”

    I wouldn’t bet the bank on that.

  9. Dan says:

    Okay heres the thing, I thought music was art! Art is supose to be enjoyed by everyone! I realy hate the RIAA! I mean realy who are the protecting? The broke artist who they clame its hurting? I also heard something about the RIAA complaing about Sirius was using more then 3 songs per hour of the same artist. What the heck is that about?

  10. gary hatch says:

    i believe we are intering into an era where those with money and power, are going to continually fight to the bitter end for total domination of all finacial institutions no matter what the arena might be. satellite radio is just another one of their of conquests to be had for the sad fact of greed and power. you might as well face the unfortunate fact that satellite radio as we have come to love and enjoy, will, in all probability, not be around within another 3 or 4 years. maybe even less.

  11. gary hatch says:

    it is a sad commentary on our nation that there are corporations today, that are so filled with the lust of power and greed, that they will go to any extent, to take what they will, at the expense of so many. satellite radio is just another casualty in the war of good vs evil. enjoy it while you can, because it is unlikely that it will exist for too much longer.

  12. Teyecoon says:

    Maybe the satellite radio companies will have to play 1 commercial an hour to raise enough money to pay off some members in Congress to protect them from the RIAA and all their paid for members of Congress.

    It seems to me that civil service work is very lucrative now with this lack of lobbying controls and so many companies trying to get “custom laws” passed that they write to protect their profits from competition.

  13. GregAllen says:

    It seems like Sirius and XM made a HUGE blunder if they didn’t lock in affordable royalty rates for a least a decade or two.

    Isn’t about 75% of their programming music? IF RIAA or anybody can pull that from them, they’re screwed.

    RIAA may be terrible and greedy but the satellite companies should have anticipated that greed if/when they became successful. So, blame the RIAA but it was Sirius and XM who screwed up.

    I have had a huge doubt about the business savvy of Sirius when they gave Howard Stern 100 million for five years. Considering the squeeze being put on him by the FCC, it was STERN who should have been begging, not Sirius.

  14. Lou says:

    The people who comment on this site continue to live in commie la-la land. Does anyone here create Intellectual Property (IP) for a living? (I’m a programmer, fwiw).

    The RIAA may be making wrong business decisions but that is their right! Listening to copyrighted music is NOT a right, it is a privilidge granted to us at whatever terms the authors and their agents (RIAA) say. Don’t like the costs, dont listen.

    As to Podcasting: How, in ANY way should podcasting be ANY different from any other music distribution system, with regard to paying royalties?

    Blaming the RIAA is just plain wrong. This is not a case of the “Ice Companies” not embracing a new business model (Refridgerators). This is a case of an organization who are protecting their members from, as best they think, from ILLEGAL ACTIVITY. This is *NOT* equivalent to fighting the VCR, or any other basic fair use issues, this is about using stuff that you didn’t pay for.

  15. Teyecoon says:

    >This is a case of an organization who are protecting their members >from, as best they think, from ILLEGAL ACTIVITY. This is *NOT* >equivalent to fighting the VCR, or any other basic fair use issues, this is >about using stuff that you didn’t pay for. – Lou

    You had merit up to this point as these organizations ARE about limiting fair use rights and it is why they are so despised. Thus, once they proved to be anti-consumer rather than pro-artist organizations, they lost all credibility and respect with anyone on the borderline of IP rights. In fact, I know plenty of people who will now happily pay an artist for a concert and artist merchandise but will not “buy” the price fixed music from these secondary profiting organizations. They’ve turned this into a battle of principles rather than a support the artists effort and it’s an important battle of precedent which the consumer must win. Point being, don’t expect any RIAA or MPAA sympathizers in any of their attempts to extract more money directly or indirectly from consumers while attempting to limit their abilities to use their “paid for” media.

  16. GregAllen says:

    Lou >>The people who comment on this site continue to live in commie la-la land. Does anyone here create Intellectual Property (IP) for a living?

    I do. Lots of it. And I think copyright laws are WAY out of control.

    100 year copyrights mean that most materials are only released into the public domain LONG AFTER they have any usefulness left. Worst, most materials will be long lost after a hundred years.

    I think 25 or 30 years about is the right amount of time for the author to make his millions but for the public to still gain some use from the product.

    I produce music and I think it is totally fair to say that I have until 2036 to make my money and then it goes into the public domain.

    Odds are, I won’t lose a dime. If it’s a big hit I might l loose some money but I’ll be rich already.


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