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Pandora fails to cut BMI rates on back of owning a single FM radio station

By | Published on Friday 31 July 2015

Pandora

Pandora has failed in its latest legal bid to lower the monies it pays to collecting society BMI.

As previously reported, Pandora has been arguing with the two big US music publishing performing rights organisations – BMI and ASCAP – over what royalties it should have to pay for streaming the songs they represent.

Despite the publishers being generally critical of the rate courts that rule on such matters when collective licensing is involved, saying judges often don’t take commercial realities into account when deciding rates, back in May the courts basically ruled in favour of BMI, demanding Pandora pay the society a 2.5% rate, rather than the 1.75% figure the streaming music service was proposing.

But Pandora continues to pursue every legal angle it can to get royalty payments down. In court this week, one specific little trick Pandora has been trying on for a while now was considered and rejected. As you may remember, back in 2013 Pandora bought itself an FM radio station in South Dakota, arguing that doing so made it a traditional broadcaster which should be able to make use of a separate more beneficial digital licensing arrangement that BMI had agreed with the US radio industry.

However, in court this week the judge rejected that argument, noting, quite reasonably, that Pandora cannot be compared to traditional radio, even if it owns a traditional radio station on the side. The Pandora business model is as different from conventional radio, he concluded, than it is from fully on-demand streaming services like Spotify, which pay higher rates to the music publishers.

So shut your face Pandora, basically. Though there are further appeals and technicalities to come on all this, almost certainly.



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