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Satellite Radio & the Perform Act:
How limiting satellite radio has turned profoundly ugly for webcasters

This is Celia Hirschman with On the Beat for KCRW.

The real dogfight in the music business these days is not the fight over the number-one record, but rather the fight over S. 2644. S.2644 is the bill currently in the hands of the Senate Judiciary Committee. It's also called the Perform Act. Tomorrow, the Committee may choose to vote on the Perform Act, which if passed, would enact new standards for radio streaming. The bill is being sponsored by Senators Dianne Feinstein, Lindsay Graham, and Bill Frist and supported by the RIAA.

The main text of the bill stems from satellite radio's recent move to recordable players.

Both XM and Sirius have released portable versions of these players that record specific streams. When XM and Sirius released their players, record labels became concerned that a new technology might deliver music to consumers in an on-demand style, without permission, proper compensation or control. The XM recordable player is called the Inno. Though XM has vehemently argued that the Inno does not offer consumers the same options as a digital download, the Inno does allow specific track recording of the XM's stream, for replay later. In my mind, if you are able to time shift recorded music, it's an on-demand product. As an on-demand service, XM and Sirius are required to pay higher royalty rates. S. 2644 is designed to balance this change in service.

A first glance the idea of compensating artists for their work sounds great. However, further investigation of this bill yields a far uglier scenario.

Hidden behind the veneer of keeping satellite radio accountable, is a provision that would require all music web casters to use Digital Rights Management, or DRM-streaming formats, rather that the MP3-file format currently used. The DRM code tags each song streamed, to insure proper compensation and usage, which also means that it tracks where the file goes.

Adding DRM to their streams would require a massive shift at radio stations. KCRW uses an MP3 stream on its website as do most radio stations currently streaming. All radio stations streaming audio would be forced to adapt their music streams to meet this ubiquitous DRM, at their own cost.

KCRW and other web casting radio stations already pay a blanket royalty for their streams now, and can use whatever streaming format they are comfortable with.

Changing to a DRM format would be important if a significant number of listeners recorded their radio streams. The truth is, they don't. There's not one bit of research that indicates that this is a growing problem.

The initial sentiment of charging satellite radio a higher rate, if they offered recordable streams makes a lot of sense. But making the entire radio webworld change as well is overkill.

Rather than focusing on what might happen in the future, why don't we deal with what is at our doorstep now.

This is Celia Hirschman with On the Beat for KCRW.

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