After more than a year of talks, Pandora filed suit against the American Society of Composers, Authors and Publishers (ASCAP) on Monday in a New York federal court after the two sides failed to reach an agreement on lower music licensing fees, Bloomberg reported.
Pandora called on the court to set more reasonable rates for the licensing fees its pays to stream music composed by ASCAP members online, according to Bloomberg. The Oakland, Calif.-based company is pushing for the court to establish a blanket licensing fee that would be applied to all the songs represented by ASCAP, the report said. Pandora argued that the current rates make it tough to reach profitability.
Pandora called on the court to set more reasonable rates for the licensing fees its pays to stream music composed by ASCAP members online, according to Bloomberg. The Oakland, Calif.-based company is pushing for the court to establish a blanket licensing fee that would be applied to all the songs represented by ASCAP, the report said. Pandora argued that the current rates make it tough to reach profitability.
In a statement, a Pandora spokesperson said the company is filing suit because ASCAP is trying to charge the Internet radio service higher licensing fees than other types of radio services.
"ASCAP continues to seek rates higher than the current rates and above the agreement that they reached earlier this year with all of the major radio groups, which covers both broadcast and Internet radio usage for the majority of our competitors," the Pandora spokesperson said in an email to The Hill. "As a result, we are initiating the process that has been in place for decades to resolve royalty disputes with ASCAP."
"ASCAP continues to seek rates higher than the current rates and above the agreement that they reached earlier this year with all of the major radio groups, which covers both broadcast and Internet radio usage for the majority of our competitors," the Pandora spokesperson said in an email to The Hill. "As a result, we are initiating the process that has been in place for decades to resolve royalty disputes with ASCAP."
Pandora is currently lobbying in Washington for a bill backed by Rep. Jason Chaffetz (R-Utah) and Sen. Ron Wyden (D-Ore.) that aims to lower the royalty fees paid by online radio stations so they're in line with the rates cable and satellite radio services pay to play a song. The company has been tapping its user base of listeners to rally support for the bill, which is expected to be discussed at a House Judiciary Committee hearing later this month.
ASCAP and Pandora did not respond to requests for comment. According to ASCAP's website, the organization comprises 435, 000 U.S. composers, songwriters, lyricists and songwriters, and manages the "licensing and distributing royalties for the non-dramatic public performances" of its members' copyrighted works.
The National Music Publishers' Association (NMPA), a trade group that represents music publishers and songwriting partners, blasted Pandora for filing the suit. The group noted that Pandora raked in $388 million in revenue last year.
“It’s outrageous Pandora would try to reduce the already nominal amount they pay songwriters and music publishers, when Pandora’s business model is based entirely on the creative contributions of those songwriters,” NMPA President David Israelite said in a statement. “To file this suit at the same time that Pandora’s founders are pocketing millions for themselves adds insult to injury.”
ASCAP and Pandora did not respond to requests for comment. According to ASCAP's website, the organization comprises 435, 000 U.S. composers, songwriters, lyricists and songwriters, and manages the "licensing and distributing royalties for the non-dramatic public performances" of its members' copyrighted works.
The National Music Publishers' Association (NMPA), a trade group that represents music publishers and songwriting partners, blasted Pandora for filing the suit. The group noted that Pandora raked in $388 million in revenue last year.
“It’s outrageous Pandora would try to reduce the already nominal amount they pay songwriters and music publishers, when Pandora’s business model is based entirely on the creative contributions of those songwriters,” NMPA President David Israelite said in a statement. “To file this suit at the same time that Pandora’s founders are pocketing millions for themselves adds insult to injury.”
-- This post was updated at 4:32 p.m. with a quote from Pandora.
- 11/06/12 03:33 PM ET
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