Pandora Royalty To Remain The Same

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Federal judge Denise Cote in New York has left the rate internet music giant Pandora must pay to songwriters essentially the same, according to reports. In a ruling handed down on Friday March 14, Cote ruled that Pandora must pay The American Society of Composers, Authors, and Publishers (ASCAP) a rate of 1.85 percent of revenue through 2015, a rate which Pandora had been paying for the previous three years.

ASCAP CEO John LoFrumento issued a statement saying, "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."

Internet radio, including streaming of music, has been growing in popularity in recent years. According to a press release on Pandora's website, the metrics for the month of February reveal that Pandora's total users has been growing significantly. Listener hours for the month of February were 1.5 billion, an increase of nine percent from the same period last year. In addition, active listeners totaled 75 million, up 11 percent from 68 million from the same period of the previous year.

LoFrumento believes this growth is cause for a higher rate than 1.85 percent. "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%."

ASCAP, which is a professional membership organization of songwriters, composers, and music publishers of every kind of music, issued the statement ahead of the public ruling from judge Denise Cote, which will likely occur next week. For now, Pandora is declining comment until the public ruling of the case.

In effect, the ruling seems like a draw between the two giant organizations. As ASCAP says, "While Judge Cote’s decision does not fully adopt the escalating rate structure that ASCAP had proposed, it also does not adopt Pandora’s argument that the 1.7% RMLC rate should apply to Pandora."

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