Yahoo has signed a licensing deal with the Recording Industry Assn. of America that will allow the portal to netcast music from the org’s member labels.
The agreement will help Yahoo circumvent the kind of legal troubles that have plagued other digital music sites, like MP3.com and Napster. Since October 1998, Yahoo has been granted a statutory license to netcast music under the terms of the federal Digital Millennium Copyright Act; this new license is a permanent netcasting arrangement.
Although precise terms of the deal were not released, the agreement is expected to use the pay-for-play format, in which Yahoo will hand over coin each time a song is played from a RIAA member on Yahoo Radio or Yahoo Broadcast.
“Our agreement with Yahoo confirms that music on the Internet will thrive when parties work together,” said Hilary Rosen, prexy and CEO of the RIAA. “We commend Yahoo for blazing a trail in the marketplace and demonstrating its commitment to the artists who create music. We are committed to Internet broadcasting as an important outlet for music, and we hope that Yahoo’s initiative will spur others to follow its lead.”
“As a leader in Internet broadcasting, we are glad to have an agreement with the RIAA which fairly compensates both artists and record companies, while continuing to provide our listeners with an entertaining online music experience,” said Jeff Mallett, prexy and chief operating officer of Yahoo.
Shares in Yahoo closed down 3.5% to $113 in trading Wednesday.