New Satellite Radio Receivers Undercut Music Industry, Apple (SIRI, XMSR, AAPL)

The two national satellite radio companies may just have found their avenue to that elusive profitability -- but they might want to get a legal fund going as well. Today's Wall St. Journal (sub. req.) notes that new recordable receivers from XM Satellite Radio (ticker: XMSR) and Sirius Satellite Radio (ticker: SIRI) leapfrog competitors' music products -- online and store-bought -- in a big way. For $13 a month...

subscribers can record far more music from satellite-radio broadcasts and manage songs as if they had bought them individually, for instance by setting up playlists and deleting songs they don't like. Because both services offer niche channels, it becomes easy for users to quickly find artists or songs they want and store them. Sirius, for instance, offers channels such as Rolling Stones Radio and Elvis Radio.

That's alarming to the music industry, which gets much lower fees for songs that are played on satellite radio than it does for songs that are purchased through download services or on CDs, or in the case of labels, for songs that play on subscription services like Napster. The music industry argues that the new devices are essentially recorders that allow consumers to keep songs permanently without paying the appropriate fees -- though users must keep subscribing to the satellite services to be able to access their recorded songs.

The satellite radio companies currently pay just 7% of revenue to the music industry, which has announced its intention to raise that figure when the contract's up for renegotiation next year.

Here are the two new receivers that could change the landscape of music sales and downloads:

1) Sirius's S50 (pictured above) -- retail: $330; 1 gigabyte of memory (about 750 songs); wearable

2) XM's Samsung-built Nexus (for sale in 1Q06) -- 512 mb and 1 gb versions: