Rate Court Rules In Favor of Pandora, ASCAP Responds

ASCAP WE CREATE MUSIC1A federal judge ruled Friday (March 14) that Pandora will continue to pay the current 1.85 percent rate for licensing of songs in the ASCAP repertoire, for each of the years 2011 to 2015. ASCAP and Pandora were in rate court because ASCAP was fighting for an escalating rate structure, which would have put Pandora’s payments in line with fair market value. Pandora argued that it should pay the 1.7 percent rate paid by terrestrial radio stations.

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According to the AP, ASCAP sought a retroactive rate increase to 2.5 percent for 2013, and 3 percent in 2014 and 2015. Pandora, the most used streaming service, has been paying 1.85 percent of revenue to ASCAP since 2011.

ASCAP CEO John LoFrumento commented, “Streaming is growing in popularity—and so is the value of music on that platform. We are pleased the court recognized the need for Pandora to pay a higher rate than traditional radio stations. But recent agreements negotiated without the artificial constraints of a consent decree make clear that the market rate for Internet radio is substantially higher than 1.85 percent. And this decision further demonstrates the need to review the entire regulatory structure, including the decades-old consent decrees that govern PRO licensing, to ensure they reflect the realities of today’s music landscape. That’s why ASCAP remains committed to working with all music industry stakeholders to create a system that preserves the benefit of collective licensing to businesses seeking music licenses, while giving consumers greater access to the music they love and allowing the 500,000 songwriters, composers and music publishers we represent to be compensated for the true value their music brings to the marketplace.”

The decision was filed under seal, pending the determination of what (if any) confidential information in the decision should be redacted.

The New York Times reports Pandora faces a similar trial against BMI, scheduled to begin later this year.

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Sarah Skates has worked in the music business for more than a decade and is a longtime contributor to MusicRow.

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