Court Rules That Pandora Doesn’t Have to Pay ASCAP More Money…

sigh

Songwriters and artists are already pretty angry at Pandora for using whatever means necessary to pay creators less money. In fact, the FCC just approved Pandora’s plan to buy a traditional radio station, a complicated loophole to lower royalties even more.

Pandora has just scored another victory.

ASCAP’s appeal of Pandora’s royalty rate has been rejected.

Pandora currently has to pay just 1.85 percent of revenue to ASCAP.

The judge also upheld a ruling that says that publishers cannot selectively license their music through PROs like ASCAP. Universal Music Publishing, Sony/ATV, and EMI Music Publishing had previously tried to pull their digital rights and directly negotiate rates with Pandora and other streaming companies.

The ruling was based on an antitrust consent decree from the 1940s, one designed to limit market bullying by powerful PROs.

Elizabeth Matthews, ASCAP’s CEO, issued the following statement:

“This ruling reaffirms what we already know – that the ASCAP Consent Decree and the rules that govern music licensing are outdated and completely out of step with the way people listen to music today.  We are encouraged that the Department of Justice is reviewing the ASCAP Consent Decree and by the growing chorus of voices in support of our efforts to modernize music licensing – from the Copyright Office to Congressional sponsors of the Songwriter Equity Act.  Powerful corporate interests, like Pandora, are determined to stand in the way of meaningful music licensing reform so that they may continue to shortchange songwriters.  This is a wake up call for creators to stand together, get involved and fight for their right to be paid a fair market rate for the use of their works.”

 

Nina Ulloa covers breaking news, tech, and more: @nine_u

Image by Daniel Horacio Agostini, licensed under Creative Commons Attribution 2.0 Generic (CC by 2.0).

12 Responses

    • Simon

      Yeah. If you don’t like something, you should kill it. That makes perfect sense. Look at the history books in music and see how that worked with Napster. Sheesh.

      Reply
    • Anonymous

      They need to die because ASCAP and the publishers are not above the law?

      Reply
        • Dr. Butternut

          You must be very frustrated, but I’m afraid that’s just not going to happen.

          Reply
  1. Bandit

    I’m a lazy sod, can you post a link to the decision so I don’t have to look it up

    Thanks

    Reply
  2. Casey Rae

    A few things to keep in mind for songwriters (people who write songs that are commercially exploited, like, you know, this guy):

    1. The ASCAP appeals court decision keeping webcasting rates at 1.85 percent means your royalties stay the same for the rest of the term, which is only through Dec. 31 of this year.

    2. Terrestrial radio pays 1.7 percent of revenue to Pandora’s 1.85. I don’t know how many of you are actually played on commercial FM, but I’m guessing it’s less than webcasting. And you have to be played to be paid. Granted, Pandora is likely to buy an FM station in South Dakota, which would make them eligible for the 1.7 rate. However:

    3. The Department of Justice is about to make recommendations to modify the consent decrees that prohibit partial withdrawal of digital rights from the performing rights societies ASCAP and BMI. Depending on what they decide, publishers may be allowed to negotiate digital licenses directly with the services, which could lead to higher rates. But do pay attention to what your songwriter guilds and associations have to say about transparency. It doesn’t serve you at all if the major publishers can play “hide the money” or trade equity and cash advances for lower writer royalties.

    4. How do we get you paid more without fracturing the licensing space and tilting the playing field to just three major publishers? There are a great many writers who own their own publishing, are with independent publishers or have sub-publishing deals with the major pubs. This is a highly complex space with multiple writers and multiple publishers on a single song. Getting paid more is important, especially as our mechanical royalties erode. But “die, Pandora” isn’t the answer. Rock solid data, transparency and yes, maybe even direct licensing under certain conditions is likely to produce a better outcome.

    Or else you’ll be asking Congress who screwed you and begging them to fix it.

    And take it from a dude in DC: they probably won’t.

    Reply
    • Bandit

      I agree with almost everything you have said, especially more transparency and artists evaluating the costs and benefits of signing their rights over to a publisher.

      However, you are being overly optimistic when you say congress “probably” won’t help fix it. It is in congress best interest to do absolutely nothing at all. Congress will only do something if failing to do something will adversely effect their chances of getting re-elected. So every congressperson knows that if they do nothing about statutory rate fixing they will get re-elected anyway and collect some sweet lobbying cash.

      Reply
    • Musician Who Understands

      Casey Rae

      “However:

      The Department of Justice is about to make recommendations to modify the consent decrees that prohibit partial withdrawal of digital rights from the performing rights societies ASCAP and BMI. Depending on what they decide,…”

      Point of clarification: Technically, all the DOJ can do is ask the Judges – who retain jurisdiction over the ASCAP and BMI Consent Decrees – to approve certain amendments that the DOJ will recommend/request. It is not at all certain that whatever the DOJ “decides” to ask for will be approved and adopted by the judges.

      Casey Rae

      “It doesn’t serve you at all if the major publishers can play “hide the money” or trade equity and cash advances for lower writer royalties.”

      Or to have those few major publishers also undermine the bargaining power/market position of the PROs that independently published songwriters will still have to go through. Remember: If Sony/ATV, Universal and Warner Chappell are permitted to pull out of ASCAP and BMI and do so, ASCAP and BMI will have to reduce their licensing fees for the remainder, to reflect the loss of those directly-licensed catalogs.

      Casey Rae

      “This is a highly complex space with multiple writers and multiple publishers on a single song. Getting paid more is important, especially as our mechanical royalties erode. But “die, Pandora” isn’t the answer.

      Precisely.

      Reply
  3. Jose Fritz

    I’ve never seen a cogent argument that explains why webcasters should pay a higher, and more complex rate than other media platforms. It never made sense to me.

    Reply
    • Anonymous

      That’s funny — it never made sense to me why radio stations are allowed to make money from my property without my permission.

      There’s zero difference between Pandora, terrestrial radio and the Pirate Bay.

      Reply

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