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Unlike download services, XM subscribers never own the programming they record from XM: it cannot be burned to a CD, transferred to other radios, or uploaded to the Internet. In addition, they can only listen to recorded XM content as long as they remain a subscriber.
XM REACHES OUT TO ARTISTS
EVP Programming Eric Logan Tries to Allay Fears Over Company's New Playback Devices
XM EVP Programming Eric Logan sent the following letter out to artists about the satellite radio company's ongoing negotiations with the record labels over their new Inno and Helix recording/playback devices:

Dear Artist,

With the recent noise and confusion around ongoing negotiations between XM and the recording industry, we feel it’s important to speak to you directly at this time.

I want to make clear that XM’s respect for you is at the core of what we do. We provide artists of all stripes with a unique connection to their fans and, unlike many new services in the age of digital music, we built our business from the very beginning on respect for copyrights and compensation for artists.

We program 69 channels of commercial-free, high quality music that help our listeners discover new artists and rediscover existing ones. We also create original music programming like “Artist Confidential,” “Artist2Artist” and “Offstage,” along with a number of exclusive music shows hosted by some of our greatest living musicians. These are all unique and innovative ways for artists to reach their fans and to share with and introduce XM subscribers to the music that inspires them. XM listeners buy more music than non-subscribers and we believe that’s because they hear more music by more artists on XM. The more music they hear and enjoy, the more music they will buy.

All artists and songwriters get paid when your music is broadcast over XM. The satellite radio industry is the single largest contributor of performance royalties to artists and record labels, and pays millions more in performance royalties annually to songwriters and music publishers. By building our networks from scratch through billions in investments, we have created a new source of royalty payments for the entire music industry. We promote more artists and play more music than FM radio does, and we pay broadcast royalties that FM has never paid.

Over the next five-year term of our digital sound recording performance license that begins next year, we expect this will amount to hundreds of millions of dollars in royalties. Satellite radio provides a higher percentage of our royalties directly to artists than digital download services: 45% of our performance royalties go directly to featured artists.

You have probably heard about our new radios, the Inno and Helix, a lot of what’s out there is misinformation. Some have mischaracterized them as download radios; they’re not. They enable listeners to save songs off the radio for playback later the 21st century equivalent of a cassette recorder, just like a VCR or TiVo can record off the air. Like recording from radio, listeners can’t choose the tracks we play. Unlike download services, XM subscribers never own the programming they record from XM: it cannot be burned to a CD, transferred to other radios, or uploaded to the Internet. In addition, they can only listen to recorded XM content as long as they remain a subscriber.

We believe our service and our radios generate great demand for music. Like home video recording has proliferated just as DVD and on-demand services have skyrocketed; we think our radios will create more interest in, and more sales of your music. And we’ve created a partnership with the new Napster online music service, so our subscribers who love a song they hear and want a permanent copy can buy and download one effortlessly.

In addition, you even receive payments from the sale of these new radios themselves. The manufacturers of the Inno, Helix, and Nexus radios pay additional royalties through the per-radio payment added to each digital recording radio sold in the U.S. under the Audio Home Recording Act (AHRA), established by Congress and fully supported by the music industry, including the labels and the RIAA.

We are in the midst of a difficult negotiation with the major labels. These disagreements can get heated before they get solved. But please remember, business is business, but musicians are family.

Again, thank you on behalf of the more than 6.5 million music fans who appreciate the passion and innovation you bring to your craft. If you have questions or comments, please don’t hesitate to email me at [email protected]. I look forward to continuing and building upon our terrific partnership.

Best,
Eric Logan
Executive Vice President, Programming
XM Satellite Radio

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