Musicians And ASCAP Lose Higher Royalties In Legal Battle Versus Pandora
Judge Denise Cote presided over the case and ruled that Pandora did not have to pay ASCAP any more than the 1.85% royalty rate for songs it plays for the period ranging from 2011-2015. According to the Wall Street Journal, ASCAP was seeking a sizable increase in royalty rates, up to 2.5% for 2013 and 3% for 2014.
It was a loss for ASCAP, to be sure, but Pandora was actually seeking to reduce its royalty rates down to 1.7%, which is what terrestrial radio station pay.
“We are pleased the court recognized the need for Pandora to pay a higher rate than traditional radio stations,” said ASCAP CEO John LoFrumento (pictured, inset) in a statement. “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%. And today’s 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.”
In effect, nothing has changed here; Pandora is paying the same rates it was before, and ASCAP is still unhappy about it, although the fight over this new paradigm of streaming radio isn’t going away anytime soon.