Pureplay services are webcasters that transmit only on the Internet; they do not transmit simulcasts of terrestrial broadcasts. Pureplay services must also be not interactive, as the term was interpreted in the Arista decision.
Pandora is an Internet radio service that broadcasts solely through the Internet; it does not provide a simulcast of a terrestrial broadcast. Unlike a terrestrial station, or even a typical Internet radio station, Pandora doesn’t broadcast a single channel or a set of channels, each adhering to a common musical genre. Instead, it streams music in the form of a unique channel that plays songs matching the user’s preference profile, established by the user’s past approval or disapproval of songs on the channel.
Pandora’s system for interpreting user preferences and generating playlists is called the Music Genome Project. This system refines the user’s channel according to qualities of the songs themselves, even without requiring the user to have the musicological vocabulary to define the qualities he or she enjoys. What the system does not do, however, is permit a user to select a particular song to hear. For instance, a user may create a station that consists largely of songs matching several of the qualities of John Coltrane’s “In a Sentimental Mood.” Upon tuning into the station, the user will be assured of hearing songs with “block piano chords, a leisurely tempo, tenor sax head, a melodic tenor sax solo and[/or] a piano solo,” but there is no guarantee that the station will actually play “In a Sentimental Mood.” This system is similar to the old LAUNCHcast system, and therefore, is not “interactive” according to the Arista decision.
Pandora is one of the companies that reached a special royalty agreement with SoundExchange in 2009 covering pureplay webcasters. Under that agreement, Pandora is likely a “large commercial webcaster,” one of the three categories presented. The other two are “small commercial webcasters” and webcasters providing syndicated, bundled, or subscription services. Each category pays according to a different royalty schedule.
LAUNCH Media, Inc.’s LAUNCHcast service has undergone some transformations since its creation in 2002. The modern form, known as Yahoo! Music Radio, is a fairly standard Internet radio service—it offers over 100 channels to which users may listen.
It is a defunct version of the service that is most significant to the history of Internet radio and webcasting. LAUNCHcast operated similarly to Pandora—users could customize channels to play music that they liked based on their expressed preferences. Also like Pandora, users could not select a particular song or artist to hear “on demand.” Despite the fact that the old LAUNCHcast system no longer exists, the Arista “interactive” definition continues to serve as a guide to viable services like Pandora and, to that extent, the old LAUNCHcast format continues to be a useful model.
Founded 2008 (Sirius founded 1989, XM founded 1990)
Sirius XM is the holding company controlling two satellite radio services—Sirius and XM. The satellite radio services offer broadcasts in a variety of formats on a subscription basis. Only users who own compatible receivers and who have paid the subscription fee are able to listen to content distributed over the satellite broadcast. However, the satellite broadcast is not the only delivery format. Both Sirius and XM offer Internet streams of their satellite broadcasts. These streams, which are only available to listeners with subscriptions to the respective services, may be accessed using ordinary computer equipment.
Sirius XM struck a deal with SoundExchange for an alternative to the royalty rate set by the Copyright Royalty Board. This deal was limited to Sirius XM’s Internet streams, not its satellite broadcasts. Like the other SoundExchange deals, this one allows other webcasters to “opt-in” under the terms that the parties negotiated.
The term “small webcasters” is derived from a SoundExchange agreement providing an alternative to the Copyright Royalty Board’s royalty rates for the period of 2006–2015. According to the regulations, an “eligible small webcaster” is a webcaster that is making “eligible nonsubscription transmissions” on the Internet, complies with Sections 112(e) and 114 of the copyright act, and makes less than $1.25 million in annual revenue.
Exactly what kinds of stations might fall under the small webcaster category is not easy to say. One might expect stations serving certain niche markets would be covered. Although the agreement speaks in terms of “small webcasters,” the definition appears more aptly to describe small radio stations that happen to webcast. In other words, large radio stations that have small webcast listenerships would not fall within this category.
Like “small webcasters,” “microcasters” is a term used in a SoundExchange agreement. Microcasters are small webcasters (other than noncommercial webcasters) that only transmit “eligible nonsubscription transmissions”, make less than $5,000 in revenue per year, has expenses of less than $10,000 per year, and doesn’t transmit more than 18,067 “Aggregate Tuning Hours” (that is, the hours of non-direct licensed music played, multiplied by the number of listeners hearing them).
Exactly which stations would fall into the category of microcasters is not clear. They are likely to be very niche-specific webcasters or those which are community-based.
LAUNCHcast / Yahoo! Music Radio