Pandora Media Takes ASCAP to Court: Seeks Lower Licensing Fees
By Karla Robinson
November 8, 2012
November 8, 2012
- Internet radio provider Pandora has gained 150 million registered users in the U.S. but hasn’t been able to make a profit due to prohibitive music licensing fees. The company is now suing the American Society of Composers, Authors and Publishers (ASCAP) for “reasonable” fees.
- “Pandora is seeking a blanket licensing fee that would cover all songs represented by the 435,000-member group,” Bloomberg reports.
- Pandora and ASCAP had an experimental fee agreement from 2005 to 2010, which Pandora said was “effectively non-negotiable” and “ill-suited and not reasonable,” according to court papers. Following that arrangement, the two sides haven’t been able to reach another agreement, which leaves the decision to the U.S. District Court in New York.
- However, ASCAP and the Radio Music Licensing Committee were able to come to a fee agreement, one that Pandora was not offered. The Radio Music Licensing Committee represents Clear Channel, which runs a rival Internet service called iHeartRadio.
- “Pandora also claims that it’s entitled to lower rates because some large music publishers have announced they are withdrawing new media rights from ASCAP and negotiating licensing fees directly with Web radio services,” Bloomberg writes.
- The proposed Internet Radio Fairness Act of 2012 could help to solve licensing disputes by requiring “music royalty rates for Web broadcasters to be comparable to what satellite radio and cable companies pay,” the article explains.
- Last year, nearly half of Pandora’s revenues went to royalties — more than six times the percentage satellite radio Sirius XM paid. “For the six months that ended July 31, Pandora reported that its net loss increased to $25.6 million from $8.57 million a year earlier, while revenue rose 54 percent to $182 million,” notes the article.
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