ASCAP vs. Pandora Royalty Case Heads To The Judge
February 18, 2014 at 3:59 AM (PT)
The ASCAP vs. PANDORA case that will determine the future of royalty payments, is now in the hands of a judge. Webcaster PANDORA argues it shouldn't have to pay ASCAP any more than radio pays -- while ASCAP believes PANDORA should pay more than its current rate.
“What’s happening with these court cases will determine the future of the music publishing and songwriting industries,” said NATIONAL MUSIC PUBLISHERS ASSOCIATION Pres. DAVID ISRAELITE. “It is simply unfair to ask songwriters and publishers to be paid something less than a fair market rate for their intellectual property.”
THE NEW YORK TIMES explains, "For nearly a century, ASCAP and BMI, known as performing rights organizations, have served an essential middleman function. They grant the licenses that let various outlets use songs, and then funnel royalties from these billions of “performances” back to publishers and songwriters. Together, the groups process more than $2 billion in licensing fees each year, and represent more than 90% of the commercially available songs in the U.S. Performance royalties have become critical for songwriters as sales of compact discs and downloads -- which pay a different kind of royalty not administered by ASCAP and BMI -- have fallen."
“It’s a godawful system that just doesn’t work,” said SONY/ATV Chairman MARTIN N. BANDIER.
THE TIMES notes, "in 2012, for example, when PANDORA’s former chief executive testified at a congressional hearing on music licensing, songwriters protested on CAPITOL HILL. Five writers of hits by stars like BEYONCÉ and CHRISTINA AGUILERA showed that 33 million plays on their songs on PANDORA yielded just $587.39 in royalties for them. Music executives argue that the problem is rooted in the Justice Department’s oversight of ASCAP and BMI. Under the consent decrees, the performing rights groups are not permitted to refuse licenses to any outlet that applies for them, and rate negotiations can drag on for years. To get around this, some big publishers have tried to change their ties with ASCAP and BMI, forcing digital outlets like PANDORA to negotiate directly."