BMI Begins Litigation With Pandora

Posted in News on February 13, 2015

BMI’s fight to receive fair market value from Pandora has begun in a Manhattan courtroom and is expected to last three weeks. Several members of BMI’s senior management team are giving testimony, including President and CEO Mike O’Neill, who presented his appeal on behalf of songwriters, composers and publishers on Wednesday.

The Company has issued this statement about the trial: “Pandora dominates the digital music industry and is one of the largest users of BMI’s music, yet it seeks to pay the same rate it paid almost ten years ago when it was an unknown Internet start-up. The foundation of Pandora’s business was built with the words and music of songwriters, and we are fighting on their behalf to secure rates that reflect the true value of their work in today’s digital marketplace.”

Pandora, which argues that its service is just another form of radio, currently pays BMI 1.75% of its revenue and wants to further reduce that rate to 1.7%, the same rate that terrestrial radio stations pay. Some publishers, unhappy with the rates determined by the BMI and ASCAP rate courts, and believing they, directly, could realize more advantageous rates, sought to withdraw certain digital rights and entered into direct licenses with Pandora for higher rates. BMI views these deals – the product of free market negotiations – as the truest indicators of the value of the publishers’ catalogs and benchmarks for the rate BMI is currently seeking at trial.

In addition to BMI’s litigation with Pandora, BMI has asked the United States Department of Justice to review the consent decree that governs its business operations, and is seeking updates to music licensing laws that preclude the consideration by our rate court of all relevant marketplace evidence. After an extensive study, the U.S. Copyright Office recently issued its report, which supports the modernization of our decree.

Check our advocacy page for further updates on this litigation and other matters urgent to music creators and copyright owners.

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