A Court on the Side of Consumers for Once: Internet Radio Services Don’t Need to License from Labels

On August 21, the U.S. Second Circuit Court of Appeals upheld an original ruling in 2007 “that found [Yahoo’s] Launchcast need only pay the standard Webcaster royalty rates to SoundExchange.” This means Launchcast is still not required to seek permission from the labels to air their music, which is a big relief for internet radio services. If the Court had overturned the original ruling, then services like Pandora, Slacker, and Last.fm would have been seriously affected.

Sony Music Entertainment originally sued Launchcast in 2001, arguing that additional licensing deals were needed since users could “build custom stations around music preferences and skip songs,” which constituted “interactivity.” The Court, however, ruled that since the songs were played in a random order, they were not considered “interactive” like imeem and MySpace.

It’s always good to see the labels getting a good kicking now and again from the justice system. It happens so rarely!

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