ASCAP And Pandora Head To Court
January 22, 2014 at 4:14 AM (PT)
THE AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS (ASCAP) was in federal court YESTERDAY (1/21) to begin a trial that could control the future of online music licensing. On the other side of the aisle -- PANDORA.
INSIDECOUNSEL.COM reports, "PANDORA currently pays 4.3% of its revenue to publishers and songwriters in the music industry represented by ASCAP and other similar organizations. By contrast, record labels and performers receive nearly half of the company’s revenue. After the two sides’ initial 2005 agreement expired in 2010, PANDORA and ASCAP have been licensing music on a new, temporary agreement that was supposed to last until 2015. However, PANDORA filed a lawsuit in NOVEMBER 2012, seeking to have a court renegotiate the deal to have it be more favorable to the Internet radio giant."
The webcaters argues it wants the same deal as terrestrial radio, which do not have to pay record companies for song use. Radio points out that airplay increases sales. ASCAP points out that the licensed music is more important to PANDORA than to terrestrial radio, because PANDORA lacks sports and talk programs and also plays fewer ads.
"The precedent set by services such as APPLE’s iTUNES could also come into play," notes INSIDECOUNSEL.COM. "APPLE pays publishers 10% of revenues from its iTUNES RADIO service, which ASCAP believes could be precedent to charge other, similar services a higher rate. A decision in PANDORA’s favor from U.S. District Judge DENISE COTE could be harmful to ASCAP’s long-term business concerns. Some publishers are considering dropping out of the society, especially after SONY withdrew new media rights from ASCAP in 2013 to pursue deals directly with various Internet radio services."