Court Gives a Victory to Pandora Over Licensing Streaming Music

Pandora emerged victorious in their court ruling this week against ASCAP.

(from New York Times, September 18, 2013)

Since online streaming sites like Pandora have become increasingly more popular with the growth of technology in the world of music, there have been a number of disputes over royalties being paid out to performing rights societies (ASCAP, BMI) for streaming services. As Pandora continues to push towards lower royalty rates for artists, many publishing companies have begun withdrawing their catalogs from the performing rights societies. By doing this, Pandora has to negotiate directly with the publishing company for the rights to the music. The benefit of this move is that the publisher has the upper hand; Sony/ATV (the world’s largest publishing company) said that it has received a 25 percent higher rate by licensing its songs directly with Pandora instead of working through ASCAP.

The two have been fighting the battle in court, and Pandora was awarded the winning verdict this last week. Pandora argued that allowing publishers to withhold their rights from certain entities violated ASCAP’s longtime consent decree. This decree essentially means that ASCAP must grant the rights to any service that inquires. The judge sided with Pandora saying that ASCAP must make all the songs in its catalog available to Pandora until its current licensing terms with them expires in 2015. When asked for a statement, Pandora’s assistant general counsel, Christopher Harrison, said he hopes, “This will put an end to the attempt by certain ASCAP-member publishers to unfairly and selectively withhold their catalogs from Pandora.”

Though Pandora may emerge victorious, ASCAP’s Chief Executive John LoFrumento was not shaken. “The court’s decision to grant summary judgment on this matter has no impact on our fundamental position in this case that songwriters deserve fair pay for their work, an issue that the court has not yet decided.” On December 4th, an even larger rate settlement between the two begins.