Psh, Lame Logo, NMPA.
The National Music Publishers Association. Definitely not as scary-sounding as the RIAA or FCC, and at least it doesn’t cause bouts of physical pain when mentioned. But for XM, the NMPA may soon be added to that list of acronyms that incite such terror. In the midst of attempting to merge with Sirius, XM is now being sued for their service called XM + MP3, which the NMPA sees as a big no-no in the world of music publishing. The service is made exclusive to XM subscribers, and allows its users to download songs that are being streamed to a certain portable music player (of the devices mentioned, Pioneer was the only one that appeared to be capable of holding this music). The motto of the XM service is “Hear It, Click It, Save It!” (yes, the exclamation point is in their catchy tagline… *shudder*), and users can do just that. But there’s a catch: the music is protected with DRM that prevents the music from being removed from the device, and once the user stops paying XM for their subscription, the music is automatically deleted.
So what’s got the NMPA all hot and bothered? The Association claims that XM is offering this service without paying any royalty fees, and that they are taking advantage of technology to offer a service that detracts from record sales and artist revenue. True, but this seems like an attempt to capitalize on the success of their business and to stick their foot in the door when XM is trying to manage a $13 billion merge. XM claims that they already pay millions of dollars in royalty payments, which is true, but it does seem a bit unfair that they would offer such a service without having worked out a previous deal with music publishers. Let’s investigate.
Publishing is where the money’s at in the record industry. If you write a song, you get the biggest cut of the royalty check. If you produce a song, you get less money, but you get more than the artist gets. So in protecting their members, NMPA is only trying to do their clients right. On the other hand, one could argue that they’re just money-hungry infidels. They’re asking for $150,000 for every song that is offered, and they list 175 songs – just a fraction of the total number of songs that are part of the service. If XM was forced to pay up for just the 175 songs alone, they would be coughing up $26,250,000, not to mention legal fees. But the NMPA is going for much more than 175 songs… They want it all.
To see it from the other side, XM is only trying to offer a service that is an add-on to the main attraction of streaming radio. Sure, it’s a pretty good feature, but it has drawbacks that work in XM’s favor: the music is only endemic to a special MP3 player and is deleted after the subscription ends. It’s almost like listening to radio on demand; and, to boot, it’s just like music downloading services that allow infinite downloads for a monthly subscription. So where’s the foul? The NMPA claims that XM isn’t paying any money to do what they’re doing. Let’s take the analogous Netflix service to compare. Netflix offers customers 3 movies at a time for a set price each month, and the service ends when the customers stop paying. Netflix pays the rights to be able to rent those movies out and make a profit. Now let’s consider how XM is doing the same thing, yet is not paying the rights to dole out the music. Doesn’t sound fair in that regard, huh? That’s because it isn’t, depending on how you look at it.
So there’s two sides to every tale. NMPA wants XM to cough up, but are they right in claiming that they should get money, or are they just gold diggers? XM claims that it’s fair, considering no music is being legitimately pirated, but shouldn’t they be paying the company whose clients provide XM with the music that their service is based on? Depending on how you look at it, the NMPA is right and XM is wrong, or vice versa. And that’s why this is a tricky situation. In my opinion, I would say that XM should have arranged a deal in the first place with NMPA so that they could do whatever they wanted with the music, and prematurely avoided confrontations like this. XM isn’t necessarily doing anything wrong, considering they already pay huge (we’re talking millions) sums to the NMPA for royalty fees of what is played on their stations. But that doesn’t make it right. XM should have sorted this out long ago, and now they’re in a sticky legal bind, deservedly so.
But to further my opinion, NMPA is sticking its hands into a pot that it shouldn’t be digging around in. XM already dishes out tons of money to them, and the NMPA does not need to exploit them to get more of it. And it’s not like there’s a deficit in the NMPA’s fiscal foundation. Like I previously said, all the money’s in publishing, and that’s the truth. The NMPA is based on a huge mountain of dollars, and they don’t really need to get another mountain... or do they? They seem to think so. Plus, they’re only thinking of themselves, as XM is made out to look poorly in the eyes of the committee who will eventually rule yay or nay on the merger with Sirius. The NMPA is throwing a stick into the gears and jamming it all up, all to get monetary (or moral, as they’re putting it) satisfaction. Not to mention the gratification of knowing that they sucked all of the money out of an industry that hasn’t even made a profit yet.
What will inevitably happen? It seems that XM has found some legislation from 1997 to hide behind, known as the Audio Home Recording Act, but things aren’t looking to good for them. They were just sued by a slew of record labels and were ruled against during the RIAA case for trying to hide behind the same cited act. The NMPA is probably going to ink an out-of-court settlement with XM, and is doing this lawsuit as a knee-jerk reaction to incite fear into the station. But XM is bound to lose lots of money, just at the moment that they need it most. XM needs to get rid of the service ASAP, and funnel some money into a service that is based on contracts, not on legal manipulations. So here’s my message for all of the services, for your enjoyment: NMPA, we know you want to scare XM and get a share of the profits, but cool it until (if?) the merger goes through; XM, get rid of that service and do something else for your users that they would like more, such as personal programming of your stations or something (I’m not your parent, you can figure out what you should be doing); and as for the courts: keep doing what you do. No one can mess with you guys.
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