Court Ruling Grants Pandora Summary Judgement

A ruling has been made in the Southern District of New York’s federal rate court requiring all publishers licensed by ASCAP to remain subject to the organization’s Pandora license through Dec. 31, 2015. The decision, announced today (Sept. 18) allows Pandora to resume using the PRO’s collective works regardless of publishers’ attempts to “withdraw” new media licensing. Further, a rate trial date has been set to begin on Dec. 4 to determine the rate Pandora will pay going forward.

EMI was the first to begin withdrawing its catalog in April 2012, followed by the remaining Sony/ATV copyrights in January when it successfully negotiated a 25 percent higher royalty rate. Universal Music Publishing Group and BMG withdrew respective digital rights from ASCAP in July, while Kobalt was scheduled to do so in October. Warner/Chappell had postponed withdrawing until 2014.

The motion for summary judgment, reported since last November, sought an interpretation of the consent decree under which ASCAP is subject by the government. Pandora asked the court to determine if selective withdrawals of so-called “new media” rights by ASCAP-member publishers violated the PRO’s consent decree. ASCAP’s prevailing royalty rate under its consent decree was reported by Billboard‘s Aug. 10 print magazine to be 1.85 percent of licensee revenue.

In a statement from ASCAP CEO John Lofrumento said: ”ASCAP’s more than 470,000 songwriter, composer and music publisher members make their living creating the music without which Pandora would have no business. 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 hard work, an issue that the Court has not yet decided. ASCAP looks forward to the December 4th trial, where ASCAP will demonstrate the true value of songwriters’ and composers’ performance rights, a value that Pandora’s music streaming competitors have recognized by negotiating rather than litigating with creators of music.”

“Pandora continues to firmly believe that musicians must be fairly compensated for their work,” said Chris Harrison, Pandora’s Assistant General Counsel. “We are committed to a responsible, sustainable and equitable royalty structure that benefits and grows the entire industry and does not discriminate against new technologies.”

Pandora recently appointed Brian McAndrews to succeed Joe Kennedy as CEO, President and Chairman.