Thursday, April 13, 2006

Sirius and EMI Reach Agreement

April 13, 2006

From Forbes.com

Sirius Satellite Radio has reached an agreement with music label EMI Music Group over a controversial portable radio player that doubles as an MP3 player.

The deal, which will allow Sirius to market its S50 device without fear of a pitched legal battle, follows pacts Sirius made with the three other major music labels last month. Music executives had argued that Sirius' player, which allows users to record up to 50 hours of music without paying any additional fees, violated earlier agreements they had signed with the satellite service.

The labels had previously threatened to head to court to prevent Sirius from selling the device. But last month Warner Music Group (nyse: WMG - news - people ), Vivendi Universal's (nyse: V - news - people ) Universal Music Group and Sony-BMG, a joint-venture of Sony (nyse: SNE - news - people ) and Bertelsmann, all settled with the satellite service. Those deals reportedly call for Sirius to pay the labels a fee for each device sold, and cap the number of gadgets that Sirius will sell. Sirius is marketing the player for $330.

Neither EMI nor Sirius representatives would comment on the specifics of their pact. "Sirius and EMI Music North America have resolved the issues specifically related to the S50," EMI spokeswoman Jeanne Meyer said in a statement. "Moving forward, the two companies are open to discussions to resolve issues relating to future products."

Sirius and competitor XM Satellite Radio (nasdaq: XMSR - news - people ) still have yet to resolve another dispute with the music industry, this one concerning how much the satellite services should pay music owners for the right to broadcast their tunes. An existing agreement between the satellite operators and the music business expires at the end of this year.

Sirius chief executive Mel Karmazin, whose service has 4 million subscribers, told an investor conference this week that if music labels wanted to increase the rates they charge satellite companies for their offerings, then they should stop offering conventional broadcasters their music free of charge.

4/13/2006 01:22:00 PM

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