Last month a US federal judge, William Connor, made an important preliminary ruling that performance royalties were not payable on music downloads (although it should be added that mechanical royalties would be). Now a federal court in New York has ruled that Yahoo!’s Launchcast service is not an interactive service and is simply a radio station. The dispute was a conclusion to a long running dispute between the web company and BMG. CMU Daily reports that Launchcast was one of the early online personalised radio services where users provide information about the kind of music they like, and rate tracks as they play, from which the service provides them with a back to back music service hopefully geared towards their music tastes. Crucially CMU Daily say, if the user does not like they can skip it – the number of skips allowed each month dependent on the kind of subscription they have. Despite the personalisation and song skipping, Launch’s owners have always claimed the service was simply an online radio station, and run it in the US under a webcasting licence secured through SoundExchange, the collecting society that coordinates those blanket music licences for online services that the record labels have to agree to under copyright law (and at rates set by the US Copyright Royalty Board).
However, when the service first launched most of the major record companies argued it was not simply a radio station, and therefore could not be operated under a standard webcasting licence. Rather, Launch would need to secure interactive service licences from the record companies directly, at rates to be agreed on a licence by licence basis. All the other majors (including a pre-merger Sony) except BMG settled with Launcast but BMG (now Sony BMG) continued and this is why the case was considered by a New York federal jury. The jury found in Yahoo!’s favour, ruling that despite having certain interactive functions, the Launchcast service was not sufficiently different from traditional webcasting services to be deemed not covered by the compulsory blanket licences. However this case was very much decided on its facts and it is still not clear what the difference between a web radio service and a true interactive service really is.
http://www.unlimitedmedia.co.uk/cmumusicnetwork.html archive 30 th April 2007