Susquehanna: Pandora receives positive ruling in royalty dispute

Susquehanna reports the judge presiding over Pandora's (P) legal battle against songwriter trade group ASCAP has declared Pandora should be classified as a radio service.

Such a ruling (assuming it holds) stands to lower Pandora's performance royalty costs. But it's worth noting Pandora's recording royalties (paid to trade group SoundExchange) easily dwarf its performance royalties. New talks with SoundExchange are set to take place this year.

Pandora bought a Rapid City, SD radio station last year in a backdoor attempt to lower its performance royalties. As it is, the company's success at growing mobile ad rates and (ad-free) subscriptions led its content acquisition costs to drop to 46% of revenue in FQ4 from 56% in the year-ago period.

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Comments (5)
  • Mark Krieger
    , contributor
    Comments (6612) | Send Message
    the market yawned at the news, the shares haven't even budged in extended hours trading
    10 Feb 2014, 07:01 PM Reply Like
  • trollipop
    , contributor
    Comments (53) | Send Message
    Maybe tomorrow it will go higher. This is good news!
    10 Feb 2014, 07:41 PM Reply Like
  • dgulick
    , contributor
    Comments (2379) | Send Message
    Interesting, ASCAP is only 4% of P's content acquisition costs, but if this is interpretted by the market as setting a precedent for the upcoming Soundexchange negotiations, this could be huge!
    More from @thenotablecalls
    "fyi, all about the cost structure. if P = radio => margins will be way-way higher."
    "feedback: this essentially eliminates the 'worst case' scenario for the trial and removes much of the overhang"
    10 Feb 2014, 08:06 PM Reply Like
  • whiteroses
    , contributor
    Comments (3) | Send Message
    and this means what?
    10 Feb 2014, 09:20 PM Reply Like
  • Rollo Tomasi
    , contributor
    Comments (275) | Send Message
    It means a lot of SA authors will lie and say that they covered their short position before tomorrow's move upward.
    10 Feb 2014, 09:30 PM Reply Like
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