LOS ANGELES (AP) — A federal judge in New York has left the
rate that Internet radio giant Pandora must pay songwriters unchanged at
1.85 percent of revenue for the next two years.
That’s according
to ASCAP — the American Society of Composers, Authors, and Publishers —
which collects royalties for some 500,000 artists and publishers in the
U.S.
ASCAP said Judge Denise Cote of the U.S. District Court in
New York made the ruling Friday. Court filings show her order and
opinion was filed under seal.
ASCAP Chief Executive John
LoFrumento said in a statement that the market rate for Internet radio
is substantially higher than 1.85 percent and said the ruling
demonstrates the need for regulatory reform. ASCAP cited several
separate deals as benchmarks, including one between music publishers and
Apple Inc. for its iTunes Radio service, as examples.
It had
sought a retroactive rate increase to 2.5 percent for 2013 and a boost
to 3 percent in 2014 and 2015. Pandora argued it should be given a rate
cut so that it would pay the same as traditional radio stations at 1.7
percent. It even bought a radio station in South Dakota last June to
qualify for the lower rate.
Pandora Media Inc. declined to comment until the ruling is publicly released, which could occur next
week.
Pandora has been paying 1.85 percent of revenue to ASCAP since 2011 on an interim basis.
The
rate is set in court because of a decades-old agreement between music
publishers and the government that was meant to constrain monopolistic
behavior.
But recently, music publishers have argued that the rate
is too low and doesn’t reflect the explosive popularity of Internet
radio, nor allow them to share fairly in its success.
Last week,
Pandora said it streamed 1.51 billion hours of music to its listeners in
February, up 9 percent from a year earlier. Its share of U.S. radio
listening rose to 8.91 percent, up from 8.25 percent a year earlier, and
it had 75.3 million active listeners.
Pandora shares dipped 13 cents in after-hours trading Friday after closing up 72 cents, or 2.1 percent,
at $35.44.
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