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Pandora Sues ASCAP, Buys In, Sells Out, Sued by BMI in June

Another month, another list of maneuvers by Pandora to whittle down their royalty rates. We're about as tired with 'em as you are, so we'll keep it simple (links to the gritty details below):

  • Pandora is stepping up it's legal battle against ASCAP. The digital music streamer filed a lawsuit against the PRO last November after Sony/ATV pulled it's digital rights as a publisher from ASCAP. The label then negotiated for higher digital royalty rates, both with Pandora and other developing Internet music streaming services like iTunes. Pandora is now asking the US copyright courts to force ASCAP to continue licensing all of its current members' songs to the music streamer--thereby locking in their current royalty rate via ASCAP--until December 31, 2015. Not good news for Universal, BMG and Warner/Chappell, who'd like to follow Sony/ATV's lead sooner than later.

  • Pandora bought a tiny FM radio station in South Dakota. Why? In hopes of getting a seat on the Radio Music Licensing Committee. Complete Music Update points out that the purchase, "in theory at least, would enable [Pandora] to reduce the royalties it pays to the American music publishers via the collecting societies, in particular ASCAP." Naturally, ASCAP is screamingbloody murder about the crafty tactic no one saw coming.

Tim Westergren Pandora sec Stock Sales

  • BMI didn't like Pandora's FM radio station purchase, either, calling it "an open and brazen effort to artificially drive down its license fees ... for the expressly stated purpose of 'qualifying for the same RMLS license under the terms as our competitors.'" So they filed a lawsuit against Pandora, asking the US courts to determine a reasonable royalty rate for Pandora when purchasing a blanket license for songs with American PROs.

  • Digital Music News reported that Pandora's Founder, Tim Westergren, has been cashing in increasingly higher amounts of personal Pandora stock each month for the last 16 months, with an average of over $1 million per month ($15.1 million to date). Westergren's monthly stock earnings are in addition to his executive salary (estimated minimum: $300,00 per year). Bear in mind this is the same fellow pleading with Congress to lower artist's digital royalty rates because his company (supposedly) has yet to turn a profit.

  • Pandora stock doubled in value over the last 12 months.

Yeah. All of that in the month of June.

Learn more about Pandora's ASCAP lawsuit @ CMU...Learn more about Pandora's FM radio strategy @ CMU...Learn more about Pandora's FM radio strategy @ ASCAP...Learn more about BMI's Pandora lawsuit @ CMU...Learn more about Westergren's SEC stats @ Digital Music News...