Starting in the late-1960’s, popular music became a fabric of American society. It also became big business. Rock and Roll and Pop music became an important and primary source of income for record labels and copyright holders. Revenues were consistently on an upward trajectory. The public listened to music for free through terrestrial radio and television and largely acquired music, which was comprised of physical product (vinyl, cassettes, compact discs), through traditional retail outlets. A business model and system was in place and everyone (the corporate entities, the copyright holders, radio, the artists, the public) knew their place and what role they played. Then in 1999, everything abruptly changed and the since that time, the music industry has been in a constant state of transformation.
It started with Napster. Napster was a pioneering peer-to-peer (“P2P”) internet file sharing service. Through the Napster platform, music fans were able to extract digital audio files from compact discs (“CDs”), usually encoded in MP3 format, and freely share them with other music fans across the internet. While there had been other P2P networks before Napster, Napster provided a user-friendly interface and quickly took the music industry by storm, and by the early 2000’s it allegedly had upwards of 60 Million registered users freely trading music. Not surprisingly, Napster and other P2P sites such as LimeWire and Grokster entered into an era of intense copyright infringement litigation, with many P2P sites ultimately shutting down as a result. As an aside, the original Napster did not survive, its brand and logos were acquired through bankruptcy auction and ultimately sold to Rhapsody by Best Buy, who rebranded itself as Napster.
Aside from copyright infringement considerations, a key role that Napster played in the evolution of today’s music business, was ushering in the era of mainstream music consumption through internet technologies, computers, MP3 players, and smart phone devices. Yes, Napster users enjoyed the sharing of free music files, but the ease and convenience of playing music through new technologies was also a very attractive feature. Streaming services such as Pandora, Rhapsody, YouTube, and Vimeo along with internet radio providers such as Sirius/SM and iHeart Radio were ultimately the end result because a growing faction of the public, particularly younger generations, were moving away from physical product as the preferred medium for listening to music. And unlike the file sharing component of Napster and other P2P sites, these streaming services comply with copyright law.
Enter Fit Radio. Fit Radio is an internet radio provider that offers a mobile app that is directed towards people who want to listen to high-energy music during physical training and work-outs. Fit Radio members are granted access to a multitude of stations containing various genres and music mixes engineered by numerous DJs. The station playlists are designed for different style workouts. With a growing list of registered users, allegedly well over 1 Million, major record labels took notice and just last week, filed a lawsuit against Fit Radio in federal court.
The Record Industry Association of America (“RIAA”), who represents Sony, Warner Brothers, Universal Music Group and other labels in this matter, alleges Fit Radio has committed significant copyright infringement through its services. The RIAA asserts Fit Radio has not obtained proper licenses for the music it programs and streams, denying artists and record labels the royalties they are entitled to. According to the RIAA, Fit Radio’s stations are programmed and uploaded by third-party DJs who do not have proper licensing and clearances.
While the original Napster operated via a P2P platform, there are similarities between how Fit Radio and the original Napster produce content for users. When the original Napster was operational, Napster users would upload content and then it could be shared by other Napster users – music would be shared freely without any rights holders being compensated. Fit Radio allegedly allows its DJ’s to upload unauthorized music content for its users to stream via the Fit Radio app, and while Fit Radio is paid a fee by its users, a fee that the rights holders do not receive any royalties from, Fit Radio still does not have permission to stream and distribute the copyrighted music to begin with. As such, the RIAA claims that Fit Radio has an unfair advantage over other music services that negotiate and pay for the right to perform, reproduce or distribute copyrighted music.
The copyright infringement litigation between the RIAA and Fit Radio is in its infancy stages, but it appears that Fit Radio has a lot to overcome. Stay tuned.