It looks like Pandora won’t be getting the lower ASCAP royalty rate they were hoping for. Then again, ASCAP isn’t getting the higher rate they were seeking, either.
The two parties were in court over the 1.85 percent performance royalty rate Pandora currently pays ASCAP. Pandora thought they should be paying 1.7 percent, which is what terrestrial radio pays… You may remember when Pandora purchased a small South Dakota radio station, hoping to get in on this lower royalty rate.
(Just to clarify, this is about publishing, not recordings. Currently, traditional broadcast radio pays nothing for the use of recordings in the US. Pandora, on the other hand, pays a relatively substantial rate for recordings.)
ASCAP felt Pandora should be paying higher publishing rates, and pushed to elevate existing payouts to 3 percent.
A federal judge has now ruled that Pandora will continue to pay the 1.85 percent rate. That’s the same rate they’ve been paying for years.
This court ruling applies to years 2011 through 2015.
ASCAP’s CEO John LoFrumento said:
“We are pleased the court recognized the need for Pandora to pay a higher rate than traditional radio stations. But recent agreements… make clear that the market rate for Internet radio is substantially higher than 1.85%. And today’s decision further demonstrates the need to review the entire regulatory structure…”
Photo from Flickr by matt44053 used with the Creative Commons License.