Pandora Wins Another Battle in the War Over Artist Compensation

Pandora scored another big win Wednesday when the 2nd US Circuit Court of Appeals ruled in the streaming music provider, affirming a ruling made in a lower court. The ruling comes just two days after Pandora was granted a broadcast license for a radio station in South Dakota. Wednesday’s ruling involves the so-called consent decree, which requires that licensing for song performance rights be granted whenever a request is made. In an effort to increase revenue from Pandora, a group of song publishers had tried to withdraw new music rights from ASCAP, the largest company that handles royalty payments for song publishers, in order to negotiate higher rates directly with Pandora. Wednesday’s ruling prevents this type of activity, declaring that publishers must be “all in or all out” with regards to being registered with ASCAP.

While Wednesday’s ruling was definitely a win for Pandora (and a loss for music publishers), there may be good news for the publishers on the horizon. While there has been no official statement from authorities, there has been hints from officials that the Justice Department may soon make changes to the consent decree. A spokesman for Pandora applauded this week’s ruling, even as many leaders in the music industry condemned it. “In the history of the struggle between creators and those who try to profit off of their work without paying them fairly, this move by Pandora ranks as the most cynical and shameless,” commented David Israelite, CEO of the National Music Publishers Association. “Now, there can be no doubt that Pandora has declared war on songwriters.” A strong response was also published by ASCAP chief executive Beth Matthews, and can be read in its entirety below.

Statement from ASCAP CEO Beth Matthews:

This ruling reaffirms what we already know – that the ASCAP Consent Decree and the rules that govern music licensing are outdated and completely out of step with the way people listen to music today. We are encouraged that the Department of Justice is reviewing the ASCAP Consent Decree and by the growing chorus of voices in support of our efforts to modernize music licensing – from the Copyright Office to Congressional sponsors of the Songwriter Equity Act. Powerful corporate interests, like Pandora, are determined to stand in the way of meaningful music licensing reform so that they may continue to shortchange songwriters. This is a wake up call for creators to stand together, get involved and fight for their right to be paid a fair market rate for the use of their works.