Portable Audio Buzz
The proliferation of digital radio – whether transmitted by land or by satellite – is causing as much turmoil in the music industry – or more – as the proliferation of peer-to-peer (P2P) file-sharing networks, which let Internet-connected PCs share digital music or video files with any other PC in the network from anywhere in the world.
The music industry’s proposal for federally mandated copy controls, however, would interfere with consumers’ rights under existing law to use digital-radio recorders to record lawfully acquired content for private personal use, CEA contends. In addition, digital radio recorders are covered by the 1992 Audio Home Recording Act (AHRA). To comply with AHRA, the products must be built so that copies cannot be made of the digital copies, and they must be designed to prevent uploading of digital content to the Internet, CEA says. Music companies and artists are also paid royalties on the sale of digital recorders under AHRA.
New hybrid satellite-radio/MP3 headphone stereos, which store time-shifted satellite-radio broadcasts, already comply with the act, CEA contends. These devices let users store broadcast songs and recall them for later playback by song title, artist name and genre. Satellite-radio providers XM and Sirius, CEA also noted, already pay millions of dollars in performance royalties for the satellite-radio broadcasts, and the suppliers of time-shifting portables pay additional royalties to the music industry under the AHRA. Under the act, stored satellite songs can’t be transferred off the devices in digital form. As an additional protection, the satellite companies note that the stored songs can’t be played if the satellite user’s subscription lapses.
Downloading Freeloaders?
Despite such precautions, the Recording Industry Association of America contends that digital radio could turn radio into a massive unauthorized, revenue-robbing free-download service. It views digital radio as a potentially greater threat than P2P services because digital radio “will offer pristine copies of songs without the threat of viruses and spyware,” the association said in Congressional testimony in early 2006. “The ubiquity and ease-of-use of radios outstrip that of computers, and the one-way method of communication allows individuals to boldly engage in piracy with little fear of detection.”
RIAA Chairman Mitch Bainwol specifically pointed to technologies that allow broadcasts “to be automatically captured and then disaggregated, song by song, into a massive library of music, neatly filed in a portable device’s digital jukebox and organized by artist, song title, genre and any other classification imaginable in a manner that substitutes for a sale.” Such products will enable terrestrial and satellite radio to “compete unfairly against [authorized] download and on-demand subscriptions services” that pay more to license music than satellite and terrestrial radio, he said.
Record labels and artists, Bainwol noted, “receive absolutely no payment from the performance of their works on terrestrial over-the-air radio” under existing performance-rights laws, although music publishers get royalties. Labels and artists thus lack the leverage to force terrestrial stations into content-protection negotiations, so the music industry must seek a regulatory remedy, RIAA said. Although artists and labels get royalties from satellite-radio broadcasts, the dollar amount of the royalties isn’t market-based but based on compulsory royalty-generating licenses mandated by law, Bainwol said. Thus, the music industry said it also lacks the leverage to negotiate higher royalty rates or enhanced content protection from the satellite companies.
Flag Waving
For its own protection, the music industry has proposed federal regulations that would embed a “broadcast flag” in all digital radio transmissions to control the redistribution of the content. The flag would carry rules that compliant devices would have to obey. Proposed rules would prevent consumers from cherry-picking individual songs for recording but would allow time shifting, automatic recording by time, program, or channel. The flag also would enable a “buy” button on digital radio recorders, with revenues split between the music and consumer electronics industries.
Although RIAA contends that a broadcast radio flag “would in no way affect legacy devices” that receive digital broadcasts, CEA said a flag would “constrain the use of networks inside the home”. Flag-compliant digital radio tuners might not recognize a networked legacy device, such as Digital Media Adapters (DMAs), preventing the DMA from reproducing music stored on a recorder located in another room.
RIAA withdrew its earlier proposal to require digital broadcasts to be encrypted. The proposal would have made obsolete the thousands of HD Radios already in consumers’ homes and cars and in suppliers’ and retailers’ inventories. Satellite-radio broadcasts already are encrypted, preventing unauthorized Internet redistribution.
