The push and pull between one of the world’s biggest audio publishers, Pandora, and one of its most important content providers, BMI (which represents a large catalog of music on behalf of composers and publishers), logged a new mile-marker last week. At issue is whether Pandora owns a “license-in-effect” to use BMI music.
Judge Louis L. Stanton ruled against Pandora on that point. Pandora cannot claim a license-in-effect to BMI music.
A license-in-effect would have guaranteed Pandora’s access to, and use of, BMI music during a tangle of negotiations and court activity. A licensing rate trial is scheduled to start February 9 — that is the standard government-regulated process when an audio publisher and either BMI or ASCAP do not agree on licensing terms. At stake in that trial are large swaths of music owned by Sony/ATV and UMPG, both of which have negotiated directly with Pandora for interim rates during 2014.
Those negotiations were set in motion by a court decision last December, which authorized publishers to withdraw rights from Pandora, if they withdrew from BMI entirely. (Publishers would prefer to selectively withdraw rights from BMI, but have not gained that privilege.)
Pandora attorney Kenneth L. Steinthal (as quoted in Law360) said that without the license-in-effect, the February rate trial will force the two sides to argue about a “moving target.” Judge Stanton’s decision identifies Pandora not as a license holder, but a license applicant. The February trial will presumably set a more stable licensing relationship between Pandora and BMI. Publishers might still have the option to withdraw entirely from BMI in order to make deals with Pandora, but withdrawing from collective licensing causes complications and challenges for both sides.
If Pandora had gained the license-in-effect, the February trial would have been about rates, only. Without the license-in-effect, the trial will also be about the license itself, according to Law360.