Pandora Goes To Court Vs. ASCAP
November 5, 2012 at 3:19 PM (PT)
PANDORA MEDIA INC. is suing ASCAP to seek lower license fees for playing their songs," BLOOMBERG.COM reports. PANDORA is seeking a blanket licensing fee that would cover all songs represented by the 435,000-member group because it believes the current fees prevent profitability.
ASCAP and PANDORA reached an "experimental" fee agreement in 2005 that lasted until 2010. "The license rates and other material terms of the 2005 license agreement were presented to PANDORA by ASCAP as being effectively non-negotiable," PANDORA asserted papers, adding that the 2005 "experimental license agreement ... was ill-suited and not reasonable."
This year ASCAP negotiated a fee agreement with the RADIO MUSIC LICENSING COMMITTEE, which represents large broadcasters such as CLEAR CHANNEL. They will pay 1.7% of gross revenue minus deductions based on advertising commissions. PANDORA said in its lawsuit that ASCAP refused to offer it the same terms.
The U.S. DISTRICT COURT in NEW YORK has jurisdiction over rate-setting if the parties can’t come to terms.