I haven’t really said much of the recent P2P software ruling, which roughly says that P2P companies aren’t really liable for the content they move around on their networks. I guess at this stage, I’ve said it a million times already that I believed that to be true and the reason that the obvious ruling hadn’t been made was because of poor lawyers on the P2P side. But finally, there was some success and now maybe the P2P software companies will get a break. If only the individual users could now get a break.

But this story caught my eye. Essentially, Scott MacLean wrote a piece of software called TimeTrax to digitally record content from XM onto his computer and organize it into MP3 files. Of course the RIAA and XM both freaked with the possibility that those MP3 files might be redistributed over the P2P networks. XM came down hard on Mr. MacLean, but frankly I believe that they have landed on the wrong side of this issue. While I realize that their content providers may have some concern about redistribution of content, I think that it’s more likely that XM benefits from this. This capability alone might encourage an other non-subscriber to sign up. (I should ‘fess up here that I own a few shares of XM.) While this would force XM into a more tenuous set of relationships with their content providers, the long run outlook is that this would be good for business.

However, if they become the bad guys, then maybe it’s time to start selling. A black eye like this with the consumer would be harmful to their long term business; maybe it would even give Sirius a boost. Today’s content reality is clear — people copy and share digital content. The best bet is to figure out how to leverage that into a clear business proposition. Seems like Mr. MacLean has figured part of that out for XM; maybe now XM will figure it out for themselves.