A federal court in New York has ruled that Yahoo!'s Launchcast service is not interactive in a long, long running dispute between the web company and SonyBMG.
Launchcast was one of the early online personalised radio services. 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 supposedly geared towards their music tastes. Crucially, if a song plays that 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.
The labels launched litigation against the service in 2001, around about the time Yahoo! acquired it. However, out of court settlements were reached with all the majors bar BMG, who continued to pursue the action even after merging with Sony, who had reached an out of court agreement. That was the case being considered by a New York federal jury last week.
And that 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. Needless to say, Yahoo! welcomed the ruling, with their Deputy General Counsel, Belinda Johnson, telling Billboard the ruling "reinforces Yahoo's view that Launchcast was in compliance with copyright law". However, SonyBMG said they disagreed with the decision and would appeal.
Whether this case provides any precedent of value isn't clear - I think the court were keen to stress their judgment applies just to the Launchcast service. However, the ruling might contribute to the wider debate as to where you draw the line between online services which are just web versions of traditional radio services, and those which are in essence an interactive model more akin to subscription based download services. It's a line that key players in web, radio and music would all like to draw in a slightly different place.