Judge Rules That Pandora Should Pay More Than Traditional Radio…

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.

5 Responses

  1. Anonymous

    “today’s decision further demonstrates the need to review the entire regulatory structure”


    What’s the idea of state-subsidized piracy in the first place?

    If Pandora — and US terrestrial radio — can’t afford to pay for the content they want, they just have to shut down.

    Radio belongs to the past. Artists get exposure elsewhere today.

  2. Wouldja get it right?

    “ASCAP felt Pandora should be paying higher publishing rates, and pushed to elevate existing payouts by 3 percent.”

    Wrong. ASCAP pushed for a 3%-of-revenue rate. That would have elevated existing payouts by over 60%.

  3. TuneHunter

    Pandora, XM or any terrestrial Radio should pay zero in any fake court or government established royalties!

    All in partnership with music ID services should be converted at once to the best and biggest music merchants.

    It’s simple and there is room for YouTube as a central coded tune dispensary and new self-service label-ONE.

    There is at least 100 billion dollars of annual music goodwill – let’s do some yoga and start in proper direction!

  4. Jayme Doran

    The same/similar thing is happening in Australia at the moment with the PPCA (the Australian equivalent of ASCAP/RIAAA) asking terrestrial radio stations to pay royalty fees to continue streaming online after a court ruling last year ruled that internet radio streaming is not part of the broadcast. As a result smaller/regional radio stations temporary turned off streaming after a disagreement with the record industry over higher and backdated fees (similar to 2001 when numerous US Radio Stations like Clear Channel/ABC Radio Network/Emmis Communications pulled some streaming. But eventually returned and in 2009 when WBEB Philadelphia pulled their live stream, but never returned over the same/similar decision by the record industry).

    Hopefully Pandora/Internet Radio doesen’t go the same fate as Australian radio is having at the moment.