Judge Rules For BMI in Royalty Battle Against Pandora
May 28, 2015 at 3:09 PM (PT)
U.S. DISTRICT COURT Judge LOUIS L. STANTON ruled for BMI in a royalty dispute with PANDORA, setting the rate at 2.5%, the NEW YORK TIMES reports. The full decision remains under seal, but the overall rate was disclosed by both parties late THURSDAY.
BMI sued in 2013 to raise the rate that PANDORA pays to play the millions of songs in the BMI catalog. PANDORA’s rate was set at 1.75% of its revenue; BMI asked the court to raise that to 2.5% and PANDORA argued for a rate as low as 1.7%.
“Today’s decision is an enormous victory for the more than 650,000 songwriters, composers and publishers that BMI has the privilege to represent,” BMI said in a statement. “This is an important step forward in valuing music in the digital age.”
Predictably, PANDORA plans to appeal the BMI decision. “We strongly believe the benchmarks cited by the court do not provide an appropriate competitive foundation for a market rate,” PANDORA spokesman DAVE GRIMALDI said.
While the ruling is a victory for the music industry, the ultimate outcome in the case is unclear. Last week, a federal appeals court affirmed a ruling that had kept PANDORA’s rate for ASCAP, a rival licensing agency, unchanged at 1.85%, rejecting ASCAP’s arguments to raise it.