7-3-13
As the consumer continues to go mobile for music, the drama over how much artists and publishers should be paid for that shift to digital continues. It certainly appears to be a complicated and expensive headache for Pandora. On many fronts, Tim Westergren and company are trying to lower the fees it pays to play music, including asking for help from Congress, to save the Pandora business model. Pandora was also pounded by the aging rock band Pink Floyd who said Pandora was trying to cut their pay. That certainly got big play in the press. And, as Pandora wages war with ASCAP, it's also cutting much more expensive side deals with labels.
Under a consent decree Pandora is paying 4.3% to ASCAP (BMI and SESAC). However, to the chagrin of Pandora, some labels are pulling out of that consent decree, and that may mean Pandora is in violation of copyright law if it plays an artist from that label. The company is awaiting a ruling on that from the ASCAP rate court. Warner/Chappell Music and BMG Chrysalis have already pulled digital rights from ASCAP as of July 1st. Sony/ATV and the EMI Music also pulled their digital rights but cut a side deal with Pandora so the service could keep playing their music.
A Universal Music Group spokesperson tells Billboard, "We can confirm that UMPG has worked out an arrangement with Pandora that we believe is in the best interest of our writers while ensuring Pandora access to our music through the end of the year." Billboard says the deal represents the highest rate Pandora has ever paid to the music publishing sector. It's a short-term deal which could still be squashed by the ASCAP rate court which could say no such deals are allowed until the current consent decree expires at the end of 2015. Pandora founder Tim Westergren says about his dealings with ASCAP and BMI, "In November of last year, following a lengthy negotiation, Pandora agreed with ASCAP to a new rate, an increase over the prior amount, and shook hands with ASCAP management. Not only was our hand-shake agreement rejected by the ASCAP board, but shortly thereafter we were subjected to a steady stream of ?withdrawals? by major publishers from ASCAP and BMI seeking to negotiate separate and higher rates with Pandora, and only Pandora.
Pandora has also tried to claim it is now a broadcaster by purchasing a South Dakota radio station hoping that would allow them to get the same low rate negotiated by the Radio Music Licensing Committee. The RMLC represents radio and has negotiated a fee of 1.7% of gross revenue for both over-the-air and digital royalties. ASCAP has said Pandora is not a broadcaster simply because it purchased one radio station.
Read the full Billboard story HERE
Read Tim Westergrens full Blog on the subject HERE
Add a Comment Send This Story To A Friend
