Calling radio station purchase a 'stunt', BMI sues Pandora

Calling radio station purchase a 'stunt', BMI sues Pandora
The other day, we told you how buying a radio station in Rapid City, South Dakota, would allow Pandora to lower the amount of money it pays to music publishers and record labels for streaming music from their artists. The purchase of  KXMZ-FM would allow Pandora to do what some of its rivals do. For example, iHeartRadio not only has a streaming music service, it also owns a number of terrestrial radio stations. BMI, a company that collects licensing fees for artists and distributes it to them, went to court on Thursday to sue Pandora in the hopes of blocking the acquisition.

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: 903; Member since: Feb 01, 2013

And why should Pandora have to pay more than "terrestrial" radio stations when they provide the same services?

3. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Because BMI and company are greedy monopolists?

2. EXkurogane

Posts: 863; Member since: Mar 07, 2013

Money is the root of all evil.

4. sprockkets

Posts: 1612; Member since: Jan 16, 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: 129; Member since: May 01, 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: Jul 13, 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.

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