BMI wins court ruling vs. Pandora in royalty rate lawsuit

bmi pandora

In a Manhattan U.S. District Court, a ruling in the BMI vs. Pandora royalty rate case went in BMI’s direction late yesterday, raising the rate at which Pandora must pay for BMI-represented music by 43%. BMI collects and distributes royalties on behalf of 650,000 songwriters, composers, and publishers.

The lawsuit began in 2013, when the two sides could not reach a rate agreement. By U.S. government regulations, the dispute went to trial as Pandora continued to program BMI music in its Internet radio streams. Pandora paid a statutory rate set at 1.75% of revenue. The trial outcome moves that rate up to 2.5%.

BMI called the judgment “an enormous victory.” ASCAP President and Chairman Paul Williams said, “ASCAP and the music community must continue to fight for the urgent reforms needed to enable all songwriters, composers and music publishers to obtain fair compensation for the use of our music.”

The Internet Association, a consortium of online compnies of which Pandora is a member, issued the following statement: “The recent decision by the New York rate court to increase the amount Pandora pays BMI by nearly 50 percent is nothing more than an innovation surcharge for new radio services.  This ruling is an unfortunate example of discriminatory treatment for Internet platforms, which fosters an uneven playing field that stifles competition and innovation online”

Pandora said publicly it planned to appeal the decision. “We disagree with the Court’s ruling and will appeal to the same court that ruled in Pandora’s favor in the ASCAP case last week,” said Dave Grimaldi, Pandora’s Director of Public Affairs.

Mention of the ASCAP case is a reference to a similar trial with a different result — ASCAP sued Pandora on the same ground as the BMI trial, and the court found in favor of Pandora, keeping its lower rate unchanged. ASCAP lost its appeal of that case earlier this month. (A few days after that, ASCAP hired a new General Counsel.)

Another factor in play is Pandora’s intended purchase of an FM radio station on South Dakota. That acquisition was stalled for over a year until the FCC lifted a reporting requirement about foreign ownership that Pandora was unable to fulfill. Pending final FCC approval of the purchase, and a deal closing, Pandora will potentially be eligible for the lower rate that radio stations pay to ASCAP and BMI.

“We strongly believe the benchmarks cited by the court do not provide an appropriate competitive foundation for a market rate,” Dave Grimaldi told RAIN News. “We anticipated a range of potential outcomes in this case and remain confident in our ability to grow and thrive.”

Brad Hill


  1. The radio station that Pandora’s been trying to buy that you made reference to is located in South Dakota, not Colorado.

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