Now, Pandora Sues ASCAP
The dispute over how much money Internet broadcasters should pay to play music took another turn yesterday as Bloomberg reported that Pandora filed a lawsuit against ASCAP. ASCAP represents 435,000 songwriters, composers and music publishers. They pay those groups from a pool of money collected from radio stations - or any other organization that plays the music. In the suit, Pandora is asking a federal court in New York to set "reasonable" license fees from ASCAP. This fee is separate from the royalty issue which Pandora, and others, are also fighting.
The Internet pure-play broadcaster is asking for a blanket licensing fee that would cover all songs in the ASCAP library (435,000). Back in 2005 Pandora and ASCAP reached a 5-year experimental agreement. Bloomberg says in the court filing Pandora says, “The license rates and other material terms of the 2005 license agreement were presented to Pandora by ASCAP as being effectively non-negotiable. The experimental license agreement was ill-suited and not reasonable.”
ASCAP has negotiated a fee agreement with the Radio Music Licensing Committee, which represents broadcasters. They will pay 1.7 percent of gross revenue minus deductions based on advertising commissions. The lawsuit claims ASCAP has refused make the same offer to Pandora. Pandora also claims, according to Bloomberg, that it’s entitled to lower rates because some large music publishers have announced they are withdrawing new media rights from ASCAP and negotiating licensing fees directly with Web radio services.
"Rates for online providers should be identical to broadcast...Pandora and terrestrial radio. There is no reason to penalize online media just because of their delivery method. The economics are difficult and we need to set online radio up to succeed."
Read the entire Bloomberg story HERE
(11/6/2012 1:53:48 PM) |
"Terrestrial radio, too, recently made a similar move. The Radio Music Licensing Committee negotiated a better rate for traditional radio, however the RMLC recently sued SESAC on behalf of broadcasters in an effort to get better terms."
(11/6/2012 7:04:43 AM) |
A reasoned fairness demands equivalencies across all platform - AM, FM, Sat, Internet. All same-same.
What ownership does with testing commercial load acceptance of an audience is up to them.
|- Ronald T. Robinson|
(11/6/2012 6:04:08 AM) |
Pandora's position seems unreasonable. Pandora by choice limits its revenue by selling considerably fewer advertising units than over the air RADIO. Why would ASCAP give them the same percentage as RADIO? If Pandora can't make money with their flawed business model they can increase AD inventory or subscription fees.
|- Gary Burns|
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