Thursday, June 13, 2013

Backlash: BMI Sues Pandora

Pandora should pay a reasonable, market-rate fee for the right to stream digital music instead of trying to piggyback on a rate cut meant for traditional radio stations, BMI claims in Federal Court.

"Pandora has embarked on a significant campaign to lower its royalty fees," Broadcast Music Inc. (BMI) claims in Manhattan Federal Court. "Rather than changing its business model to charge higher ad rates or subscription fees, Pandora has lobbied Congress to change the law in order to reduce its royalty payments to performers and record labels."

According to the Courthouse News Service, BMI says the licensing fees paid by music streaming services like Pandora have been "unreasonably low," despite the exploding popularity of online music streaming.

According to the lawsuit, Pandora has more than 200 million listeners and streams about 1.5 billion hours of music per month. Last year it streamed 14 billion hours of music - including hundreds of thousands of BMI's copyrighted songs - on computers, tablets, smartphones and other devices.

Pandora's total ad revenue is projected to reach $970 million this year and grow to $1.31 billion by 2016, BMI claims.

"The breadth of music played by Pandora is staggering compared to broadcast radio stations, making a blanket license even more valuable," BMI says.

This market trend caused publishers like EMI Music Publishing and Sony/ATV Music Publishing to withdraw their catalogs from the American Society of Composers, Authors and Publishers (ASCAP) and BMI in order to negotiate higher digital licensing fees, BMI says.

As a result, Sony and EMI can now "collect truly market-driven fees," according to the lawsuit. BMI says it should be able to do the same.

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