Is The RIAA Chasing Their Cash Cows?
June 13, 2006
Satellite Standard Group keeps you informed. Today we learned of a new device being developed that goes to the very heart of the RIAA "debate" with satellite radio. This MobiBlu device (pictured below), is an MP3 player that is capable of receiving and recording FM radio.
Since satellite radio began broadcasting the RIAA has received huge sums of money from Sirius and XM for the songs that these services play over the airwaves. By contrast, terrestrial radio does not pay anything. To be clear.......SIRIUS AND XM PAY FOR EACH SONG THEY PLAY AND TERRESTRIAL RADIO DOES NOT.
What does this mean?
It means that the RIAA has a revenue stream from satellite radio that they never used to have. Now the RIAA is trying to garner MORE money because the devices being introduced by Sirius and XM are capable of recording.
Add to this the fact that the recorded content on Sirius and XM's units stays on the device. You can not move it to your computer or to another device. Compare that to a unit such as the MobiBlu and you see something STARK. The MobiBlu actually allows you to transfer the content to a computer. Look at the "Special Features" that the device is capable of:
Does the RIAA have a failed business model? It would look like they very well might. The RIAA has chosen to take on satellite radio because the "established" practice of giving the songs to terrestrial radio for free would be hard to reverse at this point. Technology has passed the RIAA business model by.
The RIAA has chosen to attempt to garner more money from Sirius and XM. Perhaps they feel that this would be easier than changing the failed business model with terrestrial radio. Satellite radio plays more music each day (no commercials) than ANY other medium. Each song that plays puts money in the coffers of the RIAA. By making the challenges; they are making, the RIAA is biting the hand that feeds them.
What will the RIAA's argument be when devices such as the MobiBlu hit store shelves? Devices such as this are not only the real threat to the RIAA, but also pose a bit of a threat to satellite radio (although terrestrial content is very lacking when compared to Sirius or XM).
Ironically, the RIAA is behind proposed legislation that would make all of this content FREE for terrestrial radio by law. Something tells me that the RIAA was not thinking a few steps ahead. A device such as the MobiBlu may well have the RIAA suddenly seeking revisions in the legislation.
The RIAA needs to do a few things in order to be viable:
1. Get their house in order.
2. Understand the potential for technological advances.
3. Understand that satellite radio gives them an entire revenue stream that they simply did not have previously.
4. Act as a partner in the process.
The issues with the RIAA will be interesting to watch, as will their current litigation with XM Satellite Radio. Satellite Standard Group will keep you posted.
6/13/2006 02:12:00 PM
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