The Latest: Pandora Files a New Motion Against ASCAP…

In further attempt to keep publishing rates low, Pandora is asking the judge to determine whether or not publishers like Universal, BMG Chrysalis and Warner/Chapell are obligated to keep limited “New Media” rights.  Pandora believes that publishers that want to make direct deals with the internet radio company should not be able to withdraw their digital rights from ASCAP – and must stay within the bounds of the consent decree as deemed by the organization.

According to Billboard, Universal and BMG are expected to withdraw their digital rights from ASCAP on July 1st, although Warner/Chappell is keeping their decision quiet for now.

Pandora’s application for a license allows them to play music under an interim license until an official rate is set, which is technically supposed to apply to UMPG, BMG, Warner/Chappell and Sony/ATV until December 31st, 2015.

The publishers’ side of the argument is that they have the right to withdraw their rights from ASCAP at any time, particularly because ASCAP represents them non-exclusively and because songwriters have the right to change PRO association.

Currently, Pandora pays 5% of its revenue to publishers – an increase from last year’s 4.3%. However, direct licensing deals scored Warner/Chappell and Sony/ATV a 10% rate with iTunes Radio, according to Billboard.  That is encouraging publishers to reevaluate their deals with Pandora, and, hence, the alleged plans to withdraw digital rights from ASCAP.

 

A ruling on the motion is expected late July.

15 Responses

  1. astonished

    There is a story here but we’re only seeing the tip of the iceberg. The implications for internet radio are staggering.

    First, the fact that UMG, BMG, and possibly WMG will withdraw their digital rights from ASCAP will not just affect Pandora. It would affect any internet broadcaster that does not have a direct licensing deal with each respective label. That’s most internet broadcasters.

    Second, the majors’ actions here appear to be in response to Pandora’s aquisition of KXMZ in South Dakota. Pandora acquired KXMZ in order to qualify for rates that ASCAP & BMI negotiated with the Radio Music License Committee in January 2012, according to Bloomberg news. That January 2012 agreement gave more favorable rates for digital transmissions to webcasters that were owned by terrestrial broadcasters, which means that Clear Channel’s iHeart Radio pays lower rates than Pandora or any other pureplay webcaster. This all according to Bloomberg news.

    Why did ASCAP & BMI cut a deal to accept reduced digital rates that they were receiving from terrestrial broadcasters in January 2012? With all of the noise made on the web about Pandora’s efforts to reduce rates, how is it we all missed the fact that terrestrial broadcasters did it & everyone kept quiet? Was there transparency in the January 2012 deal?

    I’m an ASCAP member, and I’m outraged that ASCAP did this on the sly and is now pounding Pandora for taking advantage of the same rates they’re already giving corporate radio like Clear Channel (owners of iHeartRadio). It stinks of collusion, of old boys networks.

    You a part of that scene Paul?

    Reply
  2. someone

    These are publishers not labels. Labels aren’t members of ASCAP and BMI, only publishers and composers are. Also, this really has nothing to do with Pandora purchasing a radio station that the major publishers are leaving ASCAP and BMI. It has to do with the ability for them to directly negotiate rather than have ASCAP negotaite for them. It is a smart move to go because you get the rate you won’t and can reject a license where as ASCAP and BMI pretty much take everything on a blanket level.

    Reply
    • hippydog

      but its not a smart move..

      Theres a reason the music industry went with PRO’s in the first place, direct negotiation with EVERYONE wont happen, only the big players get to play, leaving the smaller players (who want to do things legally, but not get hosed) out in the cold..

      Everyone has to remember that its not just sony Vs spotify VS Pandory VS ascap VS google, etc etc..

      There are a LOT OF SMALLER PLAYERS that are going to be hurt by the decisions being made..

      EVERYTHING im seeing, none of it, looks likes its actually being done to help the content creaters, but to line the pockets of CEO’s and stockholders.. and I’m including BMI and ASCAP in that..

      Reply
      • Farley

        I think I’m with someone on this. In a capitalist economy the ordinary thing is for sellers to bargain with buyers individually, not as part of a government (court) created collective like an ASCAP/BMI. If the prospective buyer doesn’t like the price then they don’t buy. The rational for the court to provide for the ASCAP/BMI group negotiating solution was that the technology of the time made individual negotiating impractical. But technology has changed, so now individual negotiating is possible, at least for large sellers or voluntary groups of small sellers. I suppose there is an argument, as dog suggests, for a court to provide for group negotiating for small sellers, but it is not as strong an argument as when the technology for measuring buyer use was weaker. The reason, again, is that in a capitalist society the default is for individual negotiating on price, not government organized collective pricing.

        Reply
        • hippydog

          http://en.wikipedia.org/wiki/Broadcast_Music,_Inc.

          🙂

          Pros have been around along time.. Im NOT saying they are awesome, best thing since sliced bread, yada yada.. but the alternatives could be a lot worse..

          As to the “capitalist” thing.. when was the last time you bargained with your local farmer for eggs and milk? In theory it makes sense.. but in practice, aint gonna happen for the majority of smaller online internet broadcasters..

          and its setting a weird precedent..

          I have no problem with them pulling their music from the pros’ but they should have to pull ALL COPYWRITE from them then.. NOT just the digital rights..

          They wanna direct negotiate.. then they can also “direct negotiate” with all the venues & other users, and other “broadcasters” that ASCAP & BMI were also collecting for them.. fair is fair..

          Reply
  3. Visitor

    Interesting Pandora facts:

    Every 1,000 plays of a song on Pandora is worth about 8 cents in performance rights for the songwriters and composers ($0.00008 per stream).
    To put that in context, Miranda Lambert’s hit song “The House that Built Me” was streamed on Pandora nearly 22 million times, earning its songwriters and publishers roughly $1,788.48. Co-writer Allen Shamblin received only $894.14. Lady Antebellum’s 2011 Grammy-winning Song of the Year “Need You Now” was streamed nearly 72 million times on Pandora, earning its four songwriters and publishers $5,918.28. Co-writer Josh Kear received only $1,479.57.
    In 2012, Pandora founder Tim Westergren cashed out $9.9 million in stock options – more than the $7.6 million the company paid in total licensing fees split among all ASCAP members that same year.

    Source:

    http://www.ascap.com/playback/2013/06/action/pandora-buys-fm-radio-station-in-a-bid-to-undercut-songwriters.aspx

    Reply
      • Visitor

        …not my text, forgot quotation marks…

        Anyway, disgusting facts, eh?

        Reply
        • Visitor

          Yeah, pretty disgusting that they represtent 7% of radio in the US and FM stations pay nothing while Pandora pays hundreds of millons of dollars each year. Just imagine what that 93% would be worth

          Reply
          • Visitor

            Bottomline:

            Pandora & Spotify are absolutely worthless for artists.

            Let us encourage musicans all over the world to boycot both.

          • Visitor

            Totally, the exposure created by those services reaching millions of listeners each month with artists that get zero traditional airtime isn’t worth a dern.

            Remind me how much YouTube is paying??

          • Visitor

            “the exposure created by those services reaching millions of listeners each month with artists that get zero traditional airtime isn’t worth a dern”

            Now you get it.

  4. Pete

    Does no one remember the PAL v VHS battle? Technically PAL may have been superior but the customer voted VHS and it became #1.

    Streaming is the now the trend worldwide – even if the US is lagging somewhat – that’s driven by customers.

    iTunes Radio is signing not much better deals than Spotify et al streaming retailers – so the market is going one way.

    Either we have open market rates for ‘groups’ allowing wider & easier entry or ‘direct’ making difficult entry for new retailers.

    If the industry is not careful only a few big players will survive to the detriment of most parties involved in music.

    Reply
    • Visitor

      “iTunes Radio is signing not much better deals than Spotify et al streaming retailers”

      Difference is that iTunes Radio is the portal to the world’s greatest record store (fastest growing, too).

      That’s why it’s going to be the source of music very soon.

      While Spotify just loses money and releases by the hour…

      Reply

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