Great news for webcasters: Reuters reported that on Friday a federal appeals court in New York ruled that Yahoo’s Launchast Internet radio service is not required to pay fees to copyright holders of songs it plays, a defeat for Sony’s BMG Music. The U.S. Second Circuit Court of Appeals upheld a 2007 jury verdict that Launchcast, powered by CBS Radio and run by Yahoo’s Launch Media unit, did not give listeners enough control to be an interactive service that would require the fees. The three-judge panel said the service is required only to pay licensing fees set by SoundExchange. It was the first federal appeals court to decide the issue. This is also good news for Pandora, Jango and similar services that let users create individualized channels that play songs in a particular genre, or which are similar to their favorite artists or songs.
“It’s an immediate loss for the recording industry,” said Rey Sanchez, chairman of the department of music, media and industry at the University of Miami and a voting member of the National Academy of Recording Arts and Sciences, told Reuters. “If the service had been deemed interactive, Yahoo would have to negotiate fees with every record label to use their songs. Instead, it only has to pay licensing fees.”
Other recording companies involved in the case included Capitol Records, Motown Records and Virgin Records America.