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Court Sides With Yahoo on Streaming Licensing

Royalty question is a setback for labels

A federal appeals court says Yahoo’s Launchcast Internet radio service doesn’t meet the definition of an interactive service, and therefore doesn’t need to pay broader licensing fees to record labels for its content. The appeals court on Friday upheld an earlier jury verdict.

Instead, Launchcast is only required to pay a statutory licensing fee set by the Copyright Royalty Board, rather than pay individual licensing fees to music copyright holders for songs aired on its streaming service.

In the decision, U.S. Circuit Court Judge Richard Wesley wrote that the service provides a user experience with limited predictability, so the experience is not completely under the listener’s control and therefore doesn’t meet Congress’ definition of an interactive service.

“A user cannot listen to the playlist of another user and anticipate the songs to be played from that playlist, even if the user has selected the same preferences and rated all songs, artists, and albums identically as the other user.”