Calling radio station purchase a 'stunt', BMI sues Pandora
BMI's filing in U.S. Southern District Federal Court in New York, called Pandora's purchase of KXMZ-FM a "stunt" and accused the streaming music service of acting in bad faith as it negotiates new music licensing contracts. Terrestrial stations like KXMZ-FM (which boasts of playing "today's hits without the rap") pay less in royalty fees than online companies do, and Pandora was hoping that its purchase of the station would allow it to lower the amount it pays to firms like BMI and ASCAP.
In response, Pandora blamed the response to its purchase of the FM station to a case of music publishers discriminating against Pandora. The latter also noted that a consent decree entered into by BMI and ASCAP forces them to accept lower payments from Pandora as a result of yesterday's acquisition. The consent decree was agreed to by both ASCAP and BMI after the organizations were sued by the Department of Justice for anti-competitive behavior.
This is just the beginning of what will probably be a lengthy and time consuming legal battle. The suit asks the court to come up with a blanket rate to be paid by Pandora for all music streamed on the site. Last year, Pandora paid 4.1% of revenue to publishers, while after the purchase of the radio station, the firm seeks to pay the 1.7% standard rate for terrestrial stations negotiated by the Radio Music Licensing Committee.
source: Billboard via TheVerge, Engadget
1. o0Exia0o (Posts: 317; Member since: 01 Feb 2013)
And why should Pandora have to pay more than "terrestrial" radio stations when they provide the same services?
3. Droid_X_Doug (Posts: 5534; Member since: 22 Dec 2010)
Because BMI and company are greedy monopolists?
4. sprockkets (Posts: 1079; Member since: 16 Jan 2012)
BMI and ASCAP are evil bastards. Imagine making your own music and selling it, things that are quite possible in today's market, but being forced to pay royalties on your music to these asshats, then getting it right back minus tons of fees.
5. Diazene (Posts: 123; Member since: 01 May 2013)
well, 1.7% is pretty low (even 4.1% is), especially that they don't even have to broadcast anything or license spectrum
BTW, I'm not supporting BMI or anything, I think all that money should go to artists
6. xmusicianguy (Posts: 96; Member since: 13 Jul 2011)
I'm a musician, singer/songwriter as well as cellphone addict. But I agree. Whatever the labels and ASCAP want is MUCH more than the artist EVER sees. They make MOST of their money from concert/merch sales. Check out the YouTube video, How to get a $1 million contract and owe the label! Honestly its better going on a indie label or doing on ones own. Thats what I will be doing.