ASCAP announced that it is appealing the decision it lost to Pandora in a federal rate-setting trial in March. ASCAP (American Society of Composers, Authors asnd Publishers) seeks to reverse a district court’s ruling that set a much lower royalty rate for Pandora’s use of music created or published by ASCAP members.
In the earlier trial, federal judge Denis Cote was categorical in her rejection of ASCAP’s argument for an escalating royalty rate over a five-year period, and the high royalty levels also. Judge Cote’s reasoning held that there should be a single rate for the five-year period under examination in that trial, and that it should be lower than ASCAP’s high end. The decision set a single rate of 1.85% of Pandora revenue — exactly what the service was already paying. ASCAP hoped for a gradual increase to three percent.
RAIN projected the financial saving to Pandora (and lost-revenue cost to ASCAP members) after the first trial decision:
Judge Cote’s language during the first trial seemed to accept Pandora’s argument that it is a form of radio, and that radio’s low rates to ASCAP should serve as the main benchmark.
ASCAP disagrees with that, too. It’s current argument holds that private-market benchmarks should be used: “ASCAP believes that the district court’s summary judgment misinterprets the ASCAP consent decree and deprives ASCAP’s members of rights expressly granted to them by the Copyright Law. With respect to the district court’s rate determination, ASCAP’s brief argues that the court set a below-market price for Pandora’s license, resulting from the court’s failure to use recent direct licensing deals as relevant benchmarks.”