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Pandora defeats ASCAP again, winning appeal of 2014 royalty case

ASCAP vs Pandora

Pandora has prevailed in an appeal case brought by ASCAP, which sought to overturn a court judgment in March, 2014. ASCAP announced in August that it would pursue an appeal of that ruling.

At stake was the royalty percentage owed by Pandora to the American Society of Composers and Publishers for the 2011-2015 period. Additionally, publishers were (and still are, in other venues) battling for freedom from Consent Decrees — 60-year-old laws which provide blanket licenses for use of composed music by Pandora (as well as other streamers and radio stations). Music publishers want to negotiate digital rights separately from other ASCAP representation, which is disallowed by law.

On that key argument, the appeals court ruled decidedly that it could not rewrite the law, and publishers are beholden to the Consent Decrees. Because of that, ASCAP’s appeal for retroactively higher royalty rates was categorically denied. Last year RAIN News estimated that Pandora saved about $21-million dollars by winning the original case.

More than the money, both verdicts represent the steep hill publishers and their collection agencies (ASCAP and BMI are both regulated by Consent Decrees) must climb to modernize government regulations. The courts cannot change law, as demonstrated in the ASCAP vs. Pandora case. ASCAP, BMI, and other forces aligned with songwriters have pleaded in congressional hearings for either altering or revoking the Consent Decrees. Mainly, they want the ability to negotiate music licenses a-la-carte, willing seller to willing buyer. On the other side of the table, digital distributors like Pandora, and newer streaming startups, want to preserve the flexibility of launching businesses with statutory access to music. It is the difficult task of lawmakers to provide fair regulatory protections to both sides of the equation.

 

Brad Hill

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