Pandora Files For Lower BMI Payment

Pandora Media Inc. has played its long-expected hand in a royalty battle with Broadcast Music Inc., pointing a New York federal judge to its recently closed purchase of a South Dakota FM radio station that the company claims should slash the rate.

According to a Friday motion from the company, the purchase of KXMZ 102.7 FM in Rapid City, South Dakota sweeps the company under a significantly cheaper license negotiated by the Radio Music License Committee.

The Music Licensing entity ASCAP had ojected to the sale.  It told the FCC “that Pandora is motivated by obtaining the benefits of copyright licensing payment terms applicable to broadcasters rather than by a sincere desire to become a broadcaster; and that grant of the Petition could lead to the collapse of the collective copyright licensing system, to the detriment of copyright owners, the broadcasting industry, and American society in general”.

The FCC didn't buy that argument.

In May, Pandora lost a legal battle over the royalty rates it pays songwriters and composers, marking a victory for publishing rights group BMI.

A federal rate court 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 was seen s 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."