Oh Mercy: How On-Demand Interactive Streaming Services Navigate the Digital Music Rights Licensing Landscape

Abstract

Many view the music industry’s transition to an online distribution based business model as having been inevitable since Napster first made consumers aware of the ease with which they could access vast amounts of music online. Others insist the average listener’s growing familiarity with online music download services combined with the recent integration of on-demand interactive streaming services into social networking platforms resulted in Billboard recognizing the need to amend its coronation process. Regardless of what caused this paradigm shift, two things are clear: online music distribution is here to stay and on-demand streaming audio is the “state of the art.” In recent years, a plethora of on-demand services began offering users the ability to stream an exhaustive catalog of songs. These services are all vying to become the “celestial jukebox” of choice for the rapidly growing segment of music consumers who prefer listening to unlimited music via on-demand interactive streams over paying for individual records or downloads. This article endeavors to explain how on-demand streaming services are able to navigate the modern music licensing landscape and deliver music to their ever-growing pools of subscribers. Section I describes the difference between on-demand streaming services and other types of streaming services, then briefly discusses the history of the law pertaining to streaming technology. Section II identifies the specific rights that an on-demand streaming service implicates each time it streams a song to a user’s computer or device. Section III uses a contemporary example to demonstrate exactly how an on-demand interactive service must go about securing the licenses necessary to stream a song without infringing the rights copyright holders have to their respective works. Finally, Section IV highlights some obstacles on-demand services face under the modern music licensing regime and suggests ways for simplifying the licensing process.