Pandora, the internet radio station, has won a small victory in its recent licensing battles, with a federal court in Manhattan granting it summary judgment in its suit against one of the giant music rights organizations, the American Society of Composers and Performers. The ruling allows Pandora to keep playing all compositions in the ASCAP repertory. U.S. District Judge Denise Cote, in reaching her decision, had to interpret the anti-trust consent decree under which ASCAP has operated since 1941 and over which her court holds sway.
Under her decision (posted online by the New York Times), publishers and their songwriters may not strike separate, market-driven deals with Pandora, if they also are a member of a group like ASCAP that collects and pays them performance rights. Music publishers in recent years had started yanking their digital rights from ASCAP and the other big performance rights group, BMI — with the organizations’ assent — so they could negotiate directly with Pandora for more favorable deals, as occurred first with EMI and the largest player, Sony/ATV, which won a 25 percent higher rate in its new deal with the online streaming service.
Pandora contended the performance rights groups and publishers had to stay all in — the digital rights could not be separated and ASCAP had to license to it. The result: less money for songwriters and lower rights fees and more money for Pandora. And while this decision does not affect the current royalty rates, the issue won’t be settled by Cote’s ruling, as another court with oversight of BMI’s similar anti-trust consent decree will weigh a similar case and even more rate issues will be brought to the fore in rate proceedings, where ASCAP, which decried Pandora’s summary judgment win, says it will prevail in its position.