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"We've read that XM paid Oprah $55 million to develop content. Yet they haven't paid one penny to creators of music for copies on these devices."
—-David Israelite, President/CEO of the National Music Publishers' Assn.
MUSIC PUBLISHERS SUE
XM OVER DEVICE
Music Publishers Claim Service Encourages Copyright Infringement

EMI Music Publishing, Warner/Chappell Music, Sony/ATV, Universal Music Publishing and BMG Music Publishing have sued XM Satellite Radio over the XM + MP3 service.

The publishers seek to "put an end to the pervasive and willful copyright infringement" of their compositions distributed over the service to "iPod-like devices controlled by XM."

"We've read that XM paid Oprah $55 million to develop content," says David Israelite, President/CEO of the National Music Publishers' Assn. "Yet they haven't paid one penny to creators of music for copies on these devices."

In its role as a radio broadcaster, XM claims it licenses its music from performing rights organizations ASCAP, BMI and SESAC.

"The lawsuit filed by the NMPA is a negotiating tactic to gain an advantage in our ongoing business discussions," read an XM statement. "XM pays royalties to writers and composers who are also compensated by our device manufacturers. We are confident that the lawsuit is without merit and that we will prevail."

The publishers claim that the service delivers perfect digital copies of songs for its customers to copy to the devices, allowing subscribers to replay them for as long as they pay a monthly fee. Publishers insist that XM has not licensed the right to reproduce or distribute the recorded compositions.

The suit, filed in the federal District Court in New York, comes one month after a judge in the same court handed major labels a partial victory in their case against XM over the service. In January, federal District Court Judge Deborah Batts denied XM's attempt to dismiss the labels' lawsuit. The two suits could be joined into one, so the same judge would preside over both claims.

Sirius Satellite Radio, part of a proposed $13 billion merger with XM, settled similar claims with labels over its S50 portable device last year. While Sirius has not yet settled with publishers, Israelite expects negotiations to resume soon.

Although Universal Music Publishing Group and BMG Music Publishing are not named as plaintiffs, they are part of the suit since it was filed by the NMPA.

The publishers seek a maximum $150,000 per infringement, listing in the complaint more than 200 songs as a "small fraction" of the infringed compositions.

"We don't want to hold back the technology, nor prevent consumers' choice of how to acquire music," says Israelite. "But we must be sure that our creators are compensated properly when copies of their music are made."


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