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paidContent - Court Rules Yahoo Launchcast Doesn't Have Pay Higher Royalty Fees

This story was written by David Kaplan.


A Manhattan appeals court has deemed Yahoo Launchcast music service doesn’t have enough playlist personalization to threaten music sales, saving Yahoo (NSDQ: YHOO) millions in royalty payments to Sony’s stable of record labels, AP reported. In a suit brought against Launchcast before it was bought Yahoo in 2001, Sony (NYSE: SNE) said that the free music service dampened music sales could create their own online radio stations. But since users can’t specifically select individual tracks, Launchcast therefore qualifies as a “non-interactive” service, meaning that it has to pay far lower royalty fees than if it were considered “interactive,” which would entail higher fees and negotiations with individual record labels.

As the court explained, upholding the federal jury’s decision in favor or Yahoo in 2007, which said Launchcast is not liable to Sony for copyright infringement.

The Launchcast that exists now is a bit different from the product that drew legal action by the Recording Industry Association of America, as well as EMI and Universal. Yahoo settled individually with those parties years ago. Yahoo has since revamped Launchcast as an adjunct of of CBS (NYSE: CBS) Radio, which powers the player and handles ad sales. At the moment, Launchcast no longer offers webcasts based on users’ choices; instead it only offers a playlist based on broad genres. However, as the AP noted, Yahoo said it wants to bring Launchcast to its original format, though its unclear when it will complete that u-turn.

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By David Kaplan
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