Facing the Music: Webcasting, Interactivity, and a Sensible Statutory Royalty Scheme for Sound Recording Transmissions

By Pals, Kaitlin M. | Journal of Corporation Law, Spring 2011 | Go to article overview

Facing the Music: Webcasting, Interactivity, and a Sensible Statutory Royalty Scheme for Sound Recording Transmissions


Pals, Kaitlin M., Journal of Corporation Law


  I. Introduction
 II. Background
     A. Pre-DPRA and DMCA Copyright in Sound Recordings
     B. Digital Performance Right in Sound Recordings Act
     C. Digital Millennium Copyright Act
     D. Interactivity and 17 U.S.C. [section] 114(j)(7)
     E. Arista Records v. Launch Media
III. Analysis
     A. Arista Records v. Launch Media's Direct Effects on
        User-Influenced
        Webcasts
     B. Possible Implications of Arista Records v. Launch Media's
        Analytical
        Approach: A Purpose- and Effects-Based Performance Right in
        Sound Recordings?
        1. The Push for Parity in Sound Transmission Royalty Rates
        2. Technology Anxiety Versus Webcasting's Positive, Promotional
           Potential
 VI. Recommendation
     A. Royalty Parity Among Terrestrial, Satellite, and Internet Radio
     B. Factoring Promotional Value into a Royalty Rate that Makes
        Sense for All Forms of Radio
  V. Conclusion

I. INTRODUCTION

The Internet provides consumers with a myriad of ways to listen to and obtain music that no one ever dreamed of when Congress passed the 1976 Copyright Act. (1) Courts are now applying statutes originally drafted to handle records, audiotapes, and terrestrial radio stations to CDs, digital downloads, and online streaming audio. (2) Streaming technology alone comes in a wide array of formats, ranging from individual hobbyists creating niche musical programming (3) and official and unofficial YouTube playlists (4) to subscription jukebox services like Rhapsody (5) and create-your-own station websites like Pandora (6) and Yahoo!'s now-defunct LAUNCHcast service. (7) Congress has been trying to keep up by adapting copyright protections for sound recordings as technology advances, but it has not been a smooth process. (8)

Each of these new methods of disseminating music has its own unique attributes, and these attributes present their own distinctive assortment of benefits and risks for the record companies who hold copyrights in musical sound recordings. These new dissemination platforms therefore present legislators and courts with the difficult task of crafting copyright protection for sound recordings that balances copyright's dual goals: protecting material to incentivize creation, and making copyrighted material available so the public can receive the maximum benefit from it. (9) One of these new formats that Congress and courts have struggled with is online streaming radio, commonly known as webcasts. (10) A recent case, Arista Records, LLC, v. Launch Media, Inc., (11) resolved one contentious webcasting issue, but this Note examines not only that decision's immediate impact but also the effects the court's reasoning may have on other aspects of webcasts as they relate to copyright law.

Specifically, Part II of this Note provides a summary of the statutes that most directly affect webcasting royalties and describes how Arista Records v. Launch Media and its definition of "interactivity" as applied to webcasts fits into the statutory scheme. (12) Part III analyzes the immediate effects of the Arista Records v. Launch Media ruling on webcasters. (13) Then, it looks at how reasoning similar to that which the court used in this case would resolve two other major issues in webcasting: royalty parity among terrestrial, satellite, and web radio, and what role, if any, webcasting's promotional capabilities should play in royalty rate determinations. (14) Finally, Part IV argues that not only did the court correctly interpret Congressional intent in its definition of "interactivity" but that Congress and rate-setting bodies should use the court's purpose- and effects-based approach in resolving other webcast-related issues. (15)

II. BACKGROUND

A. Pre-DPRA and DMCA Copyright in Sound Recordings

The Constitution enables Congress to grant "for limited Times to Authors ... the exclusive Right to their respective Writings" for the purpose of promoting "the Progress of Science. …

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