ArtsWatch: iTunes Radio Is On Air: Who Will Be Listening?

Apple's streaming music platform sparks speculation over its future popularity
September 23, 2013 -- 6:45 am PDT
By Philip Merrill / GRAMMY.com

In recent news ...

Will iTunes Radio Be A Hit With Listeners?
On Sept. 18 Apple released its new iOS7 operating system with built-in support for its free, ad-supported listening service iTunes Radio, which has been hotly anticipated since its preview in June. Its many unique features were swiftly put under a microscope by reviewers such as Billboard and Cnet. Comparisons to the competition — notably Pandora — are inevitable and were generally favorable, but this game changer is only the beginning as most every Internet radio service will likely strive to innovate new features to avoid being left behind. As digital music's leading retailer, iTunes has the advantage because its Internet radio service does not need to lead its category in order to benefit Apple's bottom line because the iTunes Radio listening environment makes it very easy to buy tracks. Major brand launch partners such as Macy's, McDonalds, Nissan, Proctor & Gamble, and Pepsi are on board, and Pepsi has its own iTunes Radio station. With all eyes on Apple, the company's newest entry must now compete for ears and it will take several months to discover how this Internet radio race will be run.

ASCAP's Business With Pandora Confined To "Works"
The Southern District of New York's U.S. District Court on Sept. 17 granted Pandora's motion for summary judgment against ASCAP regarding the scope of repertory licensed for five years beginning in 2011. For antitrust reasons, ASCAP operates under a consent decree that the court found restricts it from divvying up the works it represents into separate baskets — with and without new media rights — especially while Pandora is halfway through this five-year deal. Calling attention to the ongoing rate-setting procedure, ASCAP CEO John LoFrumento said, "The court's decision to grant summary judgment on this matter has no impact on our fundamental position in this case that songwriters deserve fair pay for their hard work, an issue that the court has not yet decided. ASCAP looks forward to the Dec. 4 trial, where ASCAP will demonstrate the true value of songwriters' and composers' performance rights, a value that Pandora's music streaming competitors have recognized by negotiating rather than litigating with creators of music." This ruling keeps the scope of Pandora's license from ASCAP simple, due to the consent decree's wording regarding musical "works." While the marketplace's contention over new media rights and rates is ongoing, negotiations over Internet music licenses' terms and pricing will continue beyond the scope of this one license.

RIAA Wants More From Google
On Sept. 18 RIAA Chairman/CEO Cary Sherman appeared on a panel of witnesses addressing the House Judiciary Committee's Subcommittee on Courts, Intellectual Property, and the Internet in a hearing entitled "The Role Of Voluntary Agreements In The U.S. Intellectual Property System." His testimony reviewed the outstanding progress to date reaching voluntary agreements with Internet service providers, payment processors, advertisers and advertising intermediaries, domain name registries, as well as the development of common principles governing user-generated content. The areas he highlighted as needing particular attention going forward were search engines, cyberlockers, copyright law's current notice and takedown regime, and mobile content. Staying forward-looking and positive, Sherman said, "We invite Google and the other major search engines to sit down with us to formulate a plan that goes beyond promises of action and actually serves its intended purpose of deterring piracy and giving the legitimate marketplace an environment to thrive." His invitation is based on the fact that Internet innovation has now reached the point where legal stakeholders can and should develop win-win solutions, helping others do better business separately and together.

Studies And Lawmakers Stress The Urgent Need To Fight Piracy
MPAA Chairman Chris Dodd unveiled a study on Sept. 18 quantifying search engines' role in leading consumers to illegal Internet content. He was joined by Reps. Marsha Blackburn (R-Tenn.), Judy Chu (D-Calif.), Howard Coble (R-N.C.), and Adam Schiff (D-Calif.). Although experienced pirates know their favorite rogue sites to visit, the study found that 74 percent of consumers' first encounters with infringing websites were guided by search engines. Innocent search terms such as titles or famous dialog constituted 58 percent of searches that led to pirated content. Reflecting Google's dominance, 82 percent of searches directing users to illegal Internet sites came from Google. "Leaders in technology innovation are in a unique position to do something serious and they're being called on to do better," said Chu. Separately, on Sept. 17 Sens. Orrin Hatch (R-Utah) and Sheldon Whitehouse (D-R.I.) appeared at an event focused on the size of online piracy featuring the release of a report estimating that 432 million Internet users engaged in infringement online during January.

The Recording Academy actively represents the music community on such issues as intellectual property rights, music piracy, archiving and preservation, and censorship concerns. In pursuing its commitment to addressing these and other issues, The Recording Academy undertakes a variety of national initiatives. ArtsWatch is a key part of an agenda aimed at raising public awareness of and support for the rights of artists. To become more involved, visit Advocacy Action @ GRAMMY.com and sign up for Advocacy Action E-lerts.

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