Will These Lawsuits End Music Streaming as We Know It?
The music catalogs for many popular Internet-based streaming services could get a lot smaller if a new series of lawsuits over royalties for pre-1972 sound recordings is successful. Seven lawsuits were recently filed against some of the biggest providers of online music streaming services, including Apple’s Beats Music, Google Play, Rdio, Sony Entertainment’s Music Unlimited, Songza, Slacker, and Escape Media Group (the parent company of Grooveshark), reports The Hollywood Reporter. The lawsuits were filed by Zenbu Magazines, a company that owns the copyrights on multiple pre-1972 sound recordings.
The lawsuits allege that the various music streaming service providers are transmitting pre-1972 sound recordings without paying the appropriate royalties or licensing fees. In a copy of the lawsuit filed against Sony and provided by The Hollywood Reporter, Zenbu Magazines stated that “Through its unauthorized reproduction, performance, distribution, or other exploitation via its Music Unlimited of pre-1972 sound recordings (including the Zenbu Recordings), Sony has infringed Zenbu’s and the class members’ exclusive ownership interests in and to the pre-1972 recordings.”
In a nearly identical lawsuit filed against Apple over its Beats Music service and obtained by Gigaom, Zenbu Magazines called the company’s conduct “immoral, unethical, unscrupulous, or substantially injurious and the utility of its conduct, if any, did not outweigh the gravity of the harm to its victims.”
As noted by The Hollywood Reporter, the recent spate of lawsuits against these various music streaming services appears to have been sparked by a successful lawsuit filed by former members of the 1960s rock band The Turtles against satellite radio company SiriusXM in 2013. The former members of The Turtles eventually prevailed and won a multimillion dollar damages award against SiriusXM. The court’s decision in that case overturned years of widely accepted assumptions about how pre-1972 sound recordings are treated under copyright law.
While some of the copyright issues behind the overall dispute are rather complex, the recent lawsuits over royalties for pre-1972 sound recordings basically revolve around the issue of how federal and state copyright laws interact. “Federal copyright law applies to sound recordings but only to those produced on or after February 15, 1972. Those older recordings are protected by individual states’ statutes or common law,” explained entertainment attorney Steve Gordon at Digital Music News after the initial lawsuit was filed against SiriusXM. “Pandora and Sirius argue that since federal law does not apply to such recordings the DPRA (Digital Performance Right in Sound Recordings Act of 1995), which created a right of public performance for sound recording when transmitted digitally, does not apply to pre-1972 recordings and that therefore, they do not need permission from the owners of the copyrights in such sound recordings or the artists who performed on them.”
Up until the success of The Turtles’ lawsuit — as well as a similar lawsuit filed by the Recording Industry Association of America (RIAA) – it was widely assumed by most people involved in the music streaming industry that pre-1972 sound recordings did not require permission from the owners of the copyrights for online transmission. The new lawsuits filed against Apple’s Beats Music and other major streaming service providers seek to overturn this status quo.
Although the providers of these music streaming services could hammer out new deals with the owners of the copyrights for pre-1972 sound recordings, there is also the possibility that the service providers could simply stop streaming the disputed recordings if the royalty fees are seen as prohibitively high. While subscribers would lose access to some highly popular music, the music streaming companies may determine that the cost of keeping these songs available is not worth the royalties demanded. While a specific damages figure was not cited in Zenbu Magazines’ lawsuits against Sony and Apple, the plaintiff noted in both documents that the total from each company is likely to reach “many millions of dollars.”
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