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I work in technology, building platforms for companies, which comprise the creation of the technological product and production of the applications.

I only want to work on businesses that I believe are fully legal. I am not a law expert but try to maintain a good level of understanding of laws related to technology. I think I have a good understanding of copyright in technology, but in this case there are a few things I can't figure out.

I have been asked to build a content distribution platform, quite similar to how Spotify works, but on a business to business level. It is geared towards businesses opened to the public, typically stores. The company operates in various European countries.

It works like so: the company sources some audio content, mostly through online platforms like iTunes, buying the content, according to my understanding with a normal user account. Then they distribute the audio files to their customers premises (they can be stored locally on various platforms like a computer or a mobile phone). And then the customer plays that audio content on their premises, to the public. The service is very similar to a radio or Spotify being played in a store for the customers to enjoy.

The company assures me they are in their full right and have been operating like that for some time now. They argue that the store that is diffusing music is the one legally responsible before their respective country's copyright collection society.

Can the company really put all the legal burden on the ones diffusing the copyrighted content? I thought the distribution was also subjected to licensing. For instance, I thought platforms like Spotify need to get the license from the record companies before they start distributing copyrighted content. I thought commercial radios also needed that.

What makes me wonder is also the fact that the Apple store refuses to allow the application in their store due to legal issues. They assume that the company does not have the authorization from the third parties to let users download their content. I have no idea how Apple knows that Spotify has the rights from the third parties to allow the download of audio files and not the company since they did not ask to see the licenses first. But anyway, it makes me think some legal work must be done before distributing the content.

I would like to understand the legal aspect of each step (getting the content, distributing it and diffusing it).

  • "buying the content, according to my understanding with a normal user account": a brief review of the terms of service for normal user accounts, which should be readily available, ought to tell you whether this sort of thing complies with those terms of service. I would be shocked if it does. – phoog Mar 5 at 6:13
  • Indeed it does not comply. I understand this is sometimes recommended by small producers as a mean to get the audio file. But it has to go along with a proper license from the authorized third party. And in this case the proper license has not been granted. I now have a better understanding of the situation and have found out there is indeed a legal issue. – Adrian Mar 5 at 9:27
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Generally speaking, copyright includes the right to make copies of protected content, the right to distribute those copies, and also the right to publicly perform. Those rights are all initially vested in the creator of the copyrighted content, but may be contractually assigned, sold, or licensed separately.

When physical copies, such as books or CDs or DVDs, are lawfully sold, the purchaser has the right to resell or rent those copies without further permission. This is know as the First Sale Doctrine that the copyright owner has the right to control the copies only until their first sale.

However, electronic copies are generally not sold at all, but rather are licensed. This avoids the First sale rule, and allows the copyright owner to control the entire distribution sequence, usually though a chain of contracts each granting appropriate license rights.

So the publisher would be authorized by the copyright holder to create copies, and the publisher would license distributors, and the retail customers would be licensed in turn by the distributors, or perhaps directly by the copyright holder.

I suspect that the companies you describe actually have some sort of license agreement with the copyright holder, possibly through the publisher. The retail stores license the right to perform through the performance societies (aka collection societies) or possibly directly with the copyright holders. If in fact the companies described in the question have no license agreement with the original copyright holder (or an authorized agent), then it seems to me that they would be infringing copyright. But given how much money is involved at that level of the distribution chain, I would think that a suit would already have been filed on such grounds if there was not a valid agreement. I cannot, however, know what agreements any particular company has or has not made.

  • "given how much money is involved at that level of the distribution chain, I would think that a suit would already have been filed" I agree for companies the side of Spotify. But the company asking for the distribution platform is not nearly as big. Only their customers know that the content is coming from them, and probably don't know if the content was licensed in the first place or not. – Adrian Mar 2 at 22:17
  • @Adrian I cannot know the company's private agreements, as I now say in my answer above. – David Siegel Mar 3 at 0:04
  • thanks for your answer. Obviously I am not expecting you to know private agreements. Thanks to your answer I understand an agreement is indeed needed in order to distribute the content, it is not agreed by default. – Adrian Mar 3 at 21:12
  • In the UK, I am pretty sure that the end customer (the store) will need a PRS license to play the music. As they need a PRS license to play pretty much any music, they will already have that. – Martin Bonner supports Monica Oct 2 at 16:10

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