"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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