Pandora Sued Over Royalty Payments

The Mechanical Licensing Collective (the MLC) has sued Pandora for allegedly failing to adequately pay and report its monthly royalties, specifically in connection with the operation of its ad-supported tier “Pandora Free” (also known as “radio” or “free Pandora”).

In a lawsuit filed Monday (Feb. 12) in Nashville federal court, The MLC seeks to recover the royalties that Pandora allegedly owes them and all associated late fees. The MLC is particularly concerned with “unusually low royalties per stream” reported and paid out by Pandora, starting in 2021 which they say is due to the exclusion of substantial “Service Provider Revenue and TCC for Pandora Free.” (Total Content Cost or “TCC” refers to the amount paid by streaming services to record labels for the right to stream sound recordings. The TCC and Service Provider Revenue are essential to calculating the royalties due for this blanket license).

The MLC — which is tasked with administering the blanket mechanical license for musical works, created by the Music Modernization Act — also takes issue with Pandora’s lack of retroactive royalty accounting for 2021 and 2022.