NEW YORK – A group representing music publishers is suing XM Satellite Radio, saying that XM violates copyright laws by giving users the ability to store and replay songs on certain devices.
The National Music Publishers' Association claimed in a lawsuit filed in federal court in New York Thursday that XM Satellite Radio Holdings Inc. offers an unlawful music download service that isn't covered by the royalties it pays to music publishers for broadcast rights.
The suit targets an XM service called "XM (plus) MP3," which allows XM subscribers to store songs on portable players and play them back later. The songs remain on the device as long as the customer subscribes to XM.
Like its rival Sirius Satellite Radio Inc., XM offers dozens of channels of commercial-free music as well as talk and news channels for a monthly fee of about $13.
Sirius has agreed to buy XM, but the deal faces a tough regulatory review in Washington.
The music publishers' lawsuit is similar to another filed against XM last year by a group representing major record label companies, the Recording Industry Association of America. That case is still pending.
Like traditional radio broadcasters, satellite radio services must pay the publishers of music and record labels royalties for the right to broadcast music.
XM spokesman Chance Patterson said the lawsuit by the NMPA "simply represents a negotiating tactic to gain advantage in our ongoing business discussions. " He said the suit was without merit.
XM and Sirius were barred from merging under the licenses they were granted a decade ago, but they argue that much has changed since then, including the growth of other audio entertainment choices such as downloads from Apple Inc.'s (AAPL) iTunes stores.
The music publishers group noted in their lawsuit that XM draws attention to the ability of its XM + MP3 service to store and replay music, describing it as a substitute for using an iPod playback device and iTunes to buy music.