I. INTRODUCTION A number of streaming Internet music services have popped up recently, both in the U.S. and abroad. These services come in many shapes: some function akin to radio stations, (2) some deliver on-demand streams a la jukeboxes, (3) and some even stream your own music back to you from the "cloud." (4) The multitude of companies attempting to cash in on streaming Internet music can in part be attributed to the excellent monetization properties of streams. Streaming services--whatever the overarching arrangement may be--essentially provide single use products (streams) that perish as they are consumed. In short, Internet music streams have the commercially desirable properties of private goods: rivalry and excludability. In addition, certain classes of streaming services may take advantage of a statutory licensing scheme, giving service providers a vast library of perishable goods to deliver to consumers at low expense. (5) However, companies attempting to monetize streaming Internet music might soon have to confront a technological development similar to one that previously threatened over-the-air video and cable: the ability to capture streaming content. For television, the threat was video stream recording devices, such as the VCR and TiVo. For Internet music streams, it comes from services like Dar.fm (6) and software like PandoraJam. (7) These tools can permanently capture transient music streams without any loss in quality, (8) allowing users to save media for playback whenever desired--in effect, transforming Internet music streams to locally stored MP3 files (9) and giving them the properties of public goods. Users can then access, duplicate, and share these copies outside the control of the originating streaming service, thus depriving the service provider of ad revenue and the content owners of royalties.
