Pandora Media Inc. has lost a legal battle over the royalty rates it pays songwriters and composers, marking a victory for publishing rights group BMI.
The LA Times reports a federal rate court Thursday ruled in favor of BMI -- Broadcast Music Inc. -- which had asked the court to raise Pandora's payments to 2.5% of its revenue from 1.75%, according to statements from both parties.
The decision is an enormous victory for the more than 650,000 songwriters, composers and publishers that BMI has the privilege to represent," BMI said in a statement. "This is an important step forward in valuing music in the digital age."
Pandora pledged to appeal the ruling.
"We remain confident in our legal position," said David Grimaldi, Pandora's head of public affairs.
"We strongly believe the benchmarks cited by the court do not provide an appropriate competitive foundation for a market rate."
The ruling follows two recent legal victories for Pandora. A federal appeals court last week ruled against BMI's biggest rival, ASCAP, to keep Pandora's rate at 1.85%. In a separate dispute, the Federal Communications Commission cleared the way for Pandora to buy a South Dakota terrestrial radio station, a move that the company hopes can pave the road to lower royalties.
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