The world of internet radio stations won an important battle (at least I think it was important) the other day when a judge ruled against Sony’s attempt to collect royalties from Yahoo!’s Launchcast. As I understand it, there are two levels of payments for using copyrighted material on “networks.” One is the collecting of royalties where a broadcaster has to pay a fee directly to the holder for every time a song is played. The other is the payment of licensing fees to an umbrella organization that parcels out payments to the artists according to a complicated formula.
A regular radio station pays licensing fees, a flat rate determined by size of audience, genre, etc., and plays as much of whatever they want. A downloading service (for example) pays a royalty directly to the artist’s agent for every individual sale of a recording. Over the past few years you have no doubt read some items about people downloading popular songs without paying these royalties and the record companies filing legal claims against them.
Caught in the middle were the internet “radio” stations that function just like the over-the-air stations and “broadcast” programming in much the same format. These internet stations were threatened with early extinction when the recording companies attempted to extract royalties from them. Most of these stations are operated by one person from their home, usually without any advertising or other source of income, and a sudden demand for $250,000 in royalty payments had them shutting down and leaving millions of listeners with limited choices.
Gradually, the internet network aggregators have been winning in court in their attempt to stay in business and this week’s decision was one that will probably, in my opinion, finish this attempt by the record companies to extract as much money as they can from the “little guy” who plays their music.
TG Daily is reporting HERE that Yahoo!’s Launchcast internet radio service shouldn’t have to pay royalties for the songs that it plays:
Yahoo will only be liable to pay licensing fees to SoundExchange, the organization that collects royalties for musicians.
The case dates back to 2001, with a ruling in Yahoo’s favour in 2007, but Sony appealed.
The appeal court judges accepted Yahoo’s argument that Launchcast didn’t give users enough controls for the service to be considered interactive, the deciding factor in whether royalties were due.
Launchcast allows users to create a personalized ‘radio station’, playing their favourite musical genres. But, said judge Richard Wesley, “This degree of control is no different from a traditional radio listener expressing a preference for a country music station over a classic rock station.”
The recording industry has been hurting big-time the past several years as you may have noticed. All the big record stores have shuttered and even the little ones are almost completely gone as people have switched to the internet to both purchase their CD’s and download individual recordings.
The next format to fall will be the traditional “terrestrial” radio stations, both AM and FM bands. Myself, I don’t ever listen to the radio anymore and I haven’t for years. There’s nothing much to listen to on there, for one thing. If I’m in my car and want to have something coming out of my speakers, I put in a CD. Usually it’s one that I’ve made myself that’s a compilation of some of my favorite tunes. The radio stations seem to be 80% advertising and who wants to listen to a 5-minute stream of those irritating, noisy things? Once these satellite broadcasters get their business models worked out, or someone comes up with an economical way to grab internet signals in a moving automobile, the already-dead terrestrial radio industry will dry up completely. Sez Firegeezer.
Hey, we’d better get this equipment checked out now. I’ve got to get some more coffee started. We’ll meet back in the day room in a little while.
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