On 3/14, Judge Denise Cote issued her decision in the ASCAP rate court proceeding with Pandora, setting a rate of 1.85% for each of the five years of the license term (2011-2015). While Judge Cote’s decision does not fully adopt the escalating rate structure that ASCAP had proposed, it also does not adopt Pandora’s argument that the 1.7% RMLC rate should apply to Pandora. The rate that Pandora must pay songwriters was left unchanged by the ruling at 1.85% of revenue for the next two years. Pandora has been 1.85% of revenue to ASCAP since 2011 on an interim basis.
ASCAP collects royalties for some 500,000 artists and publishers in the U.S.
ASCAP had sought a retroactive rate increase to 2.5% for 2013 and a boost to 3% in 2014 and 2015. Pandora argued it should be given a rate cut so that it would pay the same as traditional radio stations at 1.7%. It radio station in South Dakota 6/13 to qualify for the lower rate.
Noted ASCAP CEO John LoFrumento: “Streaming is growing in popularity — and so is the value of music on that platform. We are pleased the court recognized the need for Pandora to pay a higher rate than traditional radio stations. But recent agreements negotiated without the artificial constraints of a consent decree 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, including the decades-old consent decrees that govern PRO licensing, to ensure they reflect the realities of today’s music landscape. That’s why ASCAP remains committed to working with all music industry stakeholders to create a system that preserves the benefit of collective licensing to businesses seeking music licenses, while giving consumers greater access to the music they love and allowing the 500,000 songwriters, composers and music publishers we represent to be compensated for the true value their music brings to the marketplace.”
