CNet: I was asked be interviewed about this story, but it was for radio and I live in Mexico so it wasn't going to happen. It did make me read the article though, previously I had just skimmed the title and decided it was just another mindless legal battle, but it's interesting. Basically, XM (a satellite radio station in the US) has been selling a device called the Inno which allows people to record its radio channels. The RIAA has accused XM of turning a radio service into a download service: "Because XM makes available vast catalogues of music in every genre, XM subscribers will have little need ever again to buy legitimate copies of plaintiffs' sound recordings," the lawsuit says, referring to the handheld "Inno" device."
XM replied that the Inno just allows consumers to listen to and record radio which has been legal for decades, and also points out that the device does not allow consumers to transfer recorded content and the music is not on demand...making it very little like a download service.
Except Inno doesn't just give you the chance to record straight from the channel, but to download individual songs as you hear them, which can then be added to your playlist. Songs recorded off the radio were never of very good quality and they often have things playing over the top at the beginning and end...a digital download is a different matter altogether.
I think the debate is a toss-up and will come down to legal language, but I'm inclined to go with the recording industry on this case, for once. People listen to the radio to hear new music which they then go out and buy -- if they can get the songs they like as they hear them there is little incentive to go and buy them. If it was just a "record the digital stream" function that acted like a VCR does for television I'd side with XM...
There is also the suggestion the lawsuit is a bargaining tactic since the labels are currently in talks with XM and rival Sirius to renegotiate digital royalty contracts for broadcasts. I'm not up with the details on those negotiations, but RIAA is crowing about some new legislation on the matter.