Pandora wins one of its ASCAP legal disputes
By Chris Cooke | Published on Thursday 19 September 2013
Pandora has won one of its legal battles with the music industry, with a US court ruling in a summary judgement that American music publishers cannot withdraw from the streaming firm’s existing deal with collecting society ASCAP and force the company to do direct deals.
As previously reported, Pandora went legal on this one back in June. The digital company argued that the Sony, Universal, Warner and BMG publishing companies couldn’t withdraw their ASCAP-represented song catalogues from the existing deal the society has with Pandora (even though the rates to be paid under that deal are also the subject of a legal dispute).
Most of the big publishers in the US, which have previously licensed digital performance rights through the collecting societies, are now opting to do direct deals with digital services instead, mainly because they think they can get more favourable terms.
Said publishers argued that providing they fulfilled ASCAP’s processes for withdrawing their rights, they weren’t obliged to continue licensing Pandora through the society’s existing licence. ASCAP, meanwhile, said Pandora knew that the catalogue available via that licence was subject to change. But Pandora disagreed, and this week judge Denise Cote backed that viewpoint, saying that the digital firm’s ASCAP licence “unambiguously” covers all the works the society represented at the point the deal was done.
The ruling means that the big publishers will have to continue to licence Pandora via ASCAP until 2015, even though the digital firm had actually agreed direct deals with some of them while this litigation was going through the motions.
Pandora, of course, welcomed the ruling, while ASCAP boss John Lofrumento said in a statement: “The court’s decision to grant summary judgment on this matter has no impact on our fundamental position in this case that songwriters deserve fair pay for their hard work, an issue that the court has not yet decided”.
Although Pandora still has various disputes ongoing with the wider music community, including other litigation with both ASCAP and the other big US collecting society BMI, yesterday’s win provided a little boost for the company’s share price even as that big new competitor, iTunes Radio, was going live Stateside.