VLC has announced that SHOUTcast will be removed from the next release i.e. VLC 1.1.0. SHOUTcast is a great feature in VLC which provides a directory of internet radio stations. It is developed by AOL and they want to enforce some licensing terms to VLC which goes against the principles of open-source software.
According to a VLC press release, AOL wants VLC to either comply to a license not compatible with free software or remove the SHOUTcast capability in VLC. The license basically forces VLC to integrate the spyware and adware based Shoutcast Radio Toolbar inside the user's browser. This is what chapter 6.6 of the license says:
Integrated Product. You agree to promote the SHOUTcast Radio toolbar on your web site and within the documentation of the Integrated Product subject to placement agreed to by You and Nullsoft in writing. If the Integrated Product is a software download, You agree to bundle the SHOUTcast Radio toolbar with the Integrated Product.
As it is not possible for VLC to comply with such licensing terms, they have chosen to remove SHOUTcast from VLC. This is however not the first time that something like this has happened. Amarok has also removed SHOUTcast functionalities due to similar issues.
The VLC team is however intergrating icecast - an open source alternative to SHOUTcast, into VLC. They are also urging users to get the stations to get themselves listed in icecast.