Last Thursday, before the release of her third studio album, recording artist Adele announced that her album, “25”, would not be made available on the streaming service Spotify.
Adele is not the first, or by any means the only, artist to pull their music from streaming services. Taylor Swift pulled her catalogue from Spotify last October. The Beatles and Bob Seger are also nowhere to be found on the streaming service. Some have predicted that Tidal artists such as Jay Z and Jason Aldean may also pull their music from competing streaming services. Garth Brooks takes his independence as a recording artist one step further and does not even offer his music for paid download via iTunes.
One place you will find these artists, however, is Pandora. This is because, under Section 114 of the Copyright Act, “non-interactive” digital music services can obtain compulsory licenses to transmit sound recordings. Non-interactive streaming services do not need the permission of the copyright owner to use their sound recordings – they need only comply with the statutory requirements. These requirements include limiting the number of plays from a specific album within any given three-hour time block and paying the royalty rate set forth by the Copyright Royalty Board. “Interactive” services will have to negotiate privately with the copyright owner, and may be denied a license to use the sound recording in question.
“Interactive” services are defined by the statute as services that either allow a user to receive a program specially created for that recipient, or one that delivers a specific sound recording upon request. It would appear at first glance that Pandora is absolutely interactive under the first prong of the definition. Pandora does not deliver specific songs on demand, but users can create programs specially tailored to their tastes. Pandora users can pick artists, songs, and genres and stream stations based on those choices. However, in 2009, a Second Circuit court held that a service quite similar to Pandora was “non-interactive” and therefore could take advantage of statutory licensing. This decision has been criticized as focusing less on the statutory definition and more on the consideration that this kind of streaming is less likely to replace actual album sales. Bolstered by this decision, a “non-interactive” service such as Pandora can pay lower royalty rates and maintain a larger catalogue than other music streaming services.
Responses to artists pulling their music from Spotify has been mixed. Some believe music should be freely accessible. Some believe streaming services do not appropriately value music and fail to fairly compensate artists. An incredibly popular artist such as Adele may wish to remove their albums from streaming in order to encourage customers to instead pay to own copies of the artist’s music. Newer and unknown artists may wish to license their sound recordings to streaming services in order to take advantage of the increased exposure to listeners who may not otherwise have heard of them.
At the end of the day, I believe the decision to stream or not to stream should lie with the artist. One could extensively list the pros and cons of music streaming, but perhaps the debate would be futile so long as the Copyright Act relies upon compulsory licensing. Compulsory licenses under Section 114 take the decision out of the artists’ hands when it comes to so-called “non-interactive” services such as Pandora. Perhaps these artists who have removed their music from Spotify wouldn’t do the same with Pandora. But the Copyright Act doesn’t even give them the option.