Judge leaves Pandora payment rate to songwriters unchanged

A federal judge has left the annual rate at which Pandora (P) must pay songwriters for the use of their material at 1.85% of its revenue for 2011-2015.

The American Society of Composers, Authors & Publishers (Ascap) wanted the figure to gradually rise while Pandora wanted it to drop to 1.7%, the rate for most commercial radio stations.

The decision "further demonstrates the need to review the entire regulatory structure," said Ascap CEO John LoFrumento.

Pandora faces a similar case against Broadcast Music Inc that is due to start later this year.

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Comments (5)
  • manicdvln
    , contributor
    Comments (1545) | Send Message
    Pandora has stated several times that the current rate is unsustainable for profitability. So Judges decision to hold the rate is a major blow for Pandora, and BMI looking at ASCAP trial will forge a better case to raise rates.


    Pandora will never make money, even worse with recent metrics and comments from company and CEO, it seems their growth will soon end as well.


    No profits, no growth. What's left?
    16 Mar 2014, 09:31 AM Reply Like
  • trollipop
    , contributor
    Comments (53) | Send Message
    Whew! No rate increase! Resume the rise in stock price!
    16 Mar 2014, 12:53 PM Reply Like
  • dgulick
    , contributor
    Comments (2324) | Send Message
    This is a very good outcome for P, ASCAP was seeking 3%. This ruling also exposes the hypocrisy / borderline illegality of ASCAP engaging in anti-trust behavior as they provide lower rates to Clear Channel owned iHeartRadio (a complete Pandora clone). This ruling also sets a favorable precedent for Pandora in the upcoming BMI negotiations.


    Susquehanna thinks this will be a positive catalyst for the stock:
    17 Mar 2014, 02:28 PM Reply Like
  • manicdvln
    , contributor
    Comments (1545) | Send Message
    There is no favorable precedent since if songwriters leave ASCAP it means they will also leave Pandora or ask for higher revenue than ASCAP, this is why Apple pays hell a lot more than Pandora, they cut the middleman.


    Moreover, ASCAP and BMI and others will simply focus more to lobby their legislations to increases rates under the cloak of helping songwriters.


    So in every situation, Pandora will lose out or pay more.


    Oh and stock dipped on the news today, so Susquehanna should put their mouth where the money is, which is out of Pandora.
    17 Mar 2014, 06:13 PM Reply Like
  • dgulick
    , contributor
    Comments (2324) | Send Message
    If they leave ASCAP (or BMI or SESAC) they stand to lose a lot more in royalties (ASCAP collects for everything from commercials, TV/movies, Girl Scouts singing campfire songs, ringtone public performances, public singing of "Happy Birthday to You", etc) than they can gain in negotiating direct deals with P. This is why even big labels won't do it (even Universal rejoined BMI).
    18 Mar 2014, 12:41 PM Reply Like
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