NEW YORK (AP) — Personalized Internet radio stations got a boost Friday when a federal appeals court ruled that Yahoo's LAUNCHcast music service was not interactive enough to be forced to pay hundreds of millions of dollars in licensing fees.
The 2nd U.S. Circuit Court of Appeals in Manhattan said LAUNCHcast did not offer its users so much control over selecting songs for personalized Internet radio stations that the users would choose those Webcasts over buying music.
LAUNCHcast enabled users to create stations that played songs based on how the user rated songs, artists and albums. The appeals court cited the random nature of personalized playlists when it said LAUNCHcast was not required to pay individual licensing fees to copyright holders of each song it plays for its users.
Instead, LAUNCHcast is only required to pay a statutory licensing fee set by the Copyright Royalty Board, one that tends to be cheaper and doesn't require negotiations with individual recording companies.