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US: Pandora music royalties decision criticized for outdated rules

By  |  March 20, 2014

Online music streaming company Pandora Media won a partial victory in court Wednesday as a judge did not force the firm to pay higher royalties to the American Society of Composers, Authors and Publishers, say reports.

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    While Pandora did not succeed in its efforts to have royalty rates reduced to 1.7 percent, US District Judge Denise Cote did not increase those rates to 3 percent, as sought by the ASCAP, which wanted those fees to gradually increase in 2014 and 2015.

    But according to reports, critics of Judge Cote’s decision say the ruling was based on an outdated antitrust case.

    Federal Courts review rate disputes under a settlement reached between the US Department of Justice and the ASCAP, along with music rights organization BMI, in 1941. But that settlement faces criticism of inadequately compensating artists in today’s world.

    Judge Cote disagreed, however, and dismissed the ASCAP’s claims that Pandora is “cannibalizing” music sales, instead arguing that Pandora actually promotes music sales, reports say.

    The royalty rates are now set at 1.85 percent for the next five years.

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