Roadblocks for Interactive Music

The battle over interactive music service took some twists and turns this week. On Monday, Listen.com dropped out of the lawsuit filed in a California court. As a result, Listen took down its interactive functions from its radio service that allows listeners to rate artists and skip songs.

An e-mail sent out to Listen users warned that "some aspects of Internet radio services are being questioned in the courts," which prompted them to "temporarily modify" its player features. Listen's downloadable player was modified as well, as the company asked users to download an update that removes the interactivity.

Calls to Listen were not returned as of press time, so no explanation was given.

Launch Media, meanwhile, brought back its interactive LaunchCast service. In an e-mail to users, it announced that personalized stations were activated once again with "over 25,000 songs." It also said that the rest of the over 150,000 songs would be available through its pre-programmed and fan stations.

Industry sources, however, have revealed that the LaunchCast service only contains music from Warner and a host of indie labels. Warner is the only major music label not to file suit against Launch, which opens speculations about partnerships or even an acquisition. Launch would not comment on the return of the LaunchCast service. According to the trade group representing the webcasters, Launch has not dropped out of the lawsuit filed by the Digital Media Association (DiMA).

In May, the RIAA filed suit against Launch over its LaunchCast service. Launch quickly took down its interactive service leaving just pre-programmed stations. In response, DiMA filed a suit in San Francisco, asking the court to clarify the meaning of interactivity. Just a week later, the RIAA responded by filing suit against Xact Radio, MusicMatch and MTVi's SonicNet, claiming the companies were operating their interactive stations without the proper music licenses from the labels.

The battle in the courts is taking place because of the royalty rates for webcasting that will be set by the U.S. Copyright Office in late July. The RIAA is insisting that interactive radio stations don't fall into the compulsory license of the Digital Millennium Copyright Act.