CNET News.com reported that XM Satellite Radio pulled its XM PCR PC-based radio from the market after learning that a software product has been released that allows its broadcasts to automatically be broken up into MP3 files representing individual songs. TimeTrax software from NeroSoft makes this possible. But, it is also capable of time-shifting XM programming, which is a valuable feature in and of itself.

There's more to this story than what appears at first glance. A recent article about XM Satellite Radio in Forbes Magazine said that satellite radio services must pay royalties to the recording industry, while traditional radio stations are exempt. The satellite radio services (XM and Sirius) both would like to be exempt from royalty payments also, but must overcome the lobbying efforts of the National Association of Broadcasters and the Recording Industry Association of America to get any such exemption. An MP3 stream-conversion tool like TimeTrax is probably an unacceptable political liability in the current regulatory environment.

It's unfortunate that XM pulled its PC-based radio product from the market. It was an innovative product that probably would have become more attractive to Operation Gadget readers as more of them started using satellite radio in their cars. But, the satellite radio services have to focus their limited resources in order to achieve a significant level of market penetration. TimeTrax was distracting XM's staff and, more importantly, hurting them politically.