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Panero To Content Industry: Embrace Digital Delivery

1/10/2007 12:52:00 PM Eastern

LAS VEGAS — XM Satellite Radio’s CEO Hugh Panero implored the recording industry to embrace digital delivery rather than stifle innovation and consumer choice during his keynote speech at the Consumer Electronics Association’s (CEA) annual Leaders In Technology dinner Wednesday night at the Wynn hotel.

XM is being sued by 10 recording companies for copyright infringement following the introduction of combination headphone MP3 players and satellite radio tuners from Pioneer and Samsung that allow subscribers to record and store XM’s digital broadcasts. The suit says XM has morphed into a music-download service without authorization and without paying higher royalty fees.

Panero plead his case before a dinner crowd of federal regulators, legislators and CE manufacturers, claiming fair use protection under the Audio Home Recording Act of 1992 and comparing the Pioneer Inno and Samsung Helix to VCRs -and DVRs. “Our new radios do the same thing,” he said. “It’s a new way to make consumers happy.”

Panero also took the recording industry to task for lobbying Congress to change home recording laws at the same time XM is negotiating with individual labels. “Where I come from in the Bronx they call that chutzpah,” he said, and thanked CEA for its help in blocking new legislation that would have constrained CE vendors.

“Companies should have an incentive to create great products for consumers to enjoy,” he argued. “We shouldn’t have to ask permission of content owners every time we bring new products to market.”

Lending his support was music industry icon Quincy Jones, who lauded XM for paying musicians royalties in an era of pirated downloads. “Our culture is the voice of the entire planet,” he said in his introductory remarks, “and if you don’t compensate artists it won’t continue.”