Feeds

Microsoft may pay Zune tax twice

New features, grey area

Beginner's guide to SSL certificates

Microsoft's private deal with Universal Music to pay the record label a voluntary royalty of $1 for every Zune player it sells has raised eyebrows across both the technology and music industries. But it might not be the last payment Redmond owes from Zune, we've discovered.

Recently, Steve Gordon, entertainment attorney and Reg music columnist, took a skeptical look at where Universal's Zune dollar might end up. He reminded us of a little known US tax, which harks back to the "Home Taping Is Killing Music" era. Under the Audio Home Recording Act of 1982, recording devices carry a small royalty which is then divvied up between the performing artists involved. The royalty is administered by the Alliance of Artists and Recording Companies, AARC.

(Steve explained the details here.)

You don't hear too much about AHRA or AARC, because as a consequence of a 1999 court settlement over the Diamond Rio player, it's generally assumed that all MP3 players are exempt.

But not so fast, AARC's executive director Linda Bocchi reminded us.

"People tend to throw that Rio decision around a little haphazardly," she told us. "Rio didn't say that all MP3 players are exempt. The decision was based on the fact the Rio could not record unless via the hard drive of your computer."

"But Zune is going in another direction. People can record off of FM radio, and share from one Zune player to another. It's moving away from the direction set by the iPod, and it's a grey area."

In fact, the portable players that record digital satellite radio in the US - sold by XM and Sirius - already pay an AHRA, says Bocchi.

Steve Gordon explained that XM Radio pays the labels for the music by paying SoundExchange under the DMCA compulsory license. XM also pays the labels for every INO player under AHRA.

"But the labels argue that just because they are paying for the device through AHRA, XM must pay a third payment because the INO does more than what the AHRA contemplated - such as the ability to make personalized play lists."

So is Microsoft be obliged to pay an AHR Act royalty, too?

For now, it's a case of wait and see, said Bocchi.

AARC must wait to see if Microsoft pays the royalty voluntarily, which its obliged to do under the Act, and this may take some months.

"We're watching, and there are situations where we can step in. I'm not saying we're going to, but I can see argument where we could discuss this with my board and we would decide what to do."

AARC administers around $5m worth of royalties a year - "not a huge amount", said AARC's executive director but it's an amount that's increasing.

We rang the Zune team to see if Microsoft thought the player fell under the AHR Act - but they didn't get back to us in time for publication. We'll update you if and when they do. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Same old iPad? NO. The new 'soft SIMs' are BIG NEWS
AppleSIM 'ware to allow quick switch of carriers
Brits: Google, can you scrape 60k pages from web, pleeease
Hey, c'mon Choc Factory, it's our 'right to be forgotten'
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
FCC, Google cast eye over millimetre wireless
The smaller the wave, the bigger 5G's chances of success
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.