RIAA Takes Aim At Digital Radio Recorders

Recording Industry Assn. of America (RIAA) chairman/CEO Mitch Bainwol says that while he is "enthusiastic" about High Definition (HD) digital radio, the trade group has major concerns that the planned

WASHINGTON, D.C. -- Recording Industry Assn. of America (RIAA) chairman/CEO Mitch Bainwol says that while he is "enthusiastic" about High Definition (HD) digital radio, the trade group has major concerns that the planned second-generation receiver/recorders could allow consumers to "cherry-pick" and copy individual songs.

"You'll have a situation where radio isn't radio anymore, but a method for acquisition and redistribution (of tracks) without payment," says Bainwol.

Such use, he says, would be devastating to an already hard-hit industry. "You'll have a situation that undermines the future investment in music and funding of new art," he says.

Current digital radio receivers do not employ technology to copy individual tracks, only blocks of programming.

The RIAA is so concerned that it is planning to have its general counsel educate lawmakers about the dangers of digital radio recording in testimony at an upcoming House hearing.

It's certainly not surprising that the RIAA wants to alert members of Congress that future digital radio receivers might be able to "cherry-pick" individual tracks -- with the same audio quality as a CD -- and copy them without paying royalties to companies or artists. What is surprising, however, is that RIAA general counsel Steven Marks will bring up the concerns at a hearing to be scheduled soon to review an entirely different issue: Internet streaming of radio broadcasts.

U.S. radio broadcasters have never paid royalties to record companies for the performance of sound recordings on analog radio. And they're livid that they must now pay for digital simulcast streams.

The U.S. Court of Appeals in Philadelphia ruled in October 2003 that Congress mandated that simulcasters pay the royalties under two laws: the Digital Millennium Copyright Act of 1998 (DMCA) and the Digital Performance Right Act of 1995 (DPRA).

The National Assn. of Broadcasters (NAB) has stated publicly there will not be a Supreme court challenge. So they're taking their case back to Congress.

The RIAA is confident that the court's rejection of NAB's arguments, and a similar earlier Copyright Office ruling against broadcasters, ensures that Congress would be loath to revisit the performance-royalty sections of the DMCA and the DPRA.

The Federal Communications Commission (FCC) authorized interim regulations for digital radio in 2002. Its current inquiry will define and set final rules. Comments are due June 15.

"So the time is ripe," says Bainwol.

In addition to the upcoming testimony at the hearing and ongoing discussions at the FCC, the RIAA has already circulated legislative language on digital radio protection.

"Like we've talking to the FCC about our concerns, we've also talked to people on Capitol Hill," says RIAA's Marks.

The trade group is not specifically asking the FCC for a copy-protection audio flag, or for a limit on "manual recording," in which a consumer can start and stop a recording at will. However, the group opposes automatic functions in which a device can search for and record a specific track.

"We're not asking (the FCC) to say there can't be this cherry-picking functionality," says Marks. "We're just saying material shouldn't be allowed to be cherry-picked and redistributed unless it's paid for. What we're asking for is business-model-enabling."

One suggestion is to include a "Buy" button on new receiver/recorders. The RIAA execs say they have approached the NAB about sharing a percentage of any such radio-driven sales.

Radio stations have always said they're the best promotional vehicle for sales of music," says Marks. "Here they'd have the opportunity for the impulse purchase, which is the Holy Grail of retailing."

The Consumer Electronics Assn. (CEA), which represents manufacturers, opposes any changes in receivers, and believes customers have a right to tape any and all broadcast material for non-commercial use, according to chairman/CEO Gary Shapiro.