On Wednesday this week, a New York federal judge refused to lower the royalty rate Pandora is paying Broadcast Media Inc. (BMI), rejecting their argument they are entitled to pay a smaller amount following their purchase of a South Dakota radio station.
Pandora has been fighting an original decision requiring them to pay a 2.5% royalty fee to BMI, one of America’s three performing rights associations that distribute royalties to music publishers and composers. Pandora has been arguing that because it purchased KXMZ, a radio station in South Dakota, it should be entitled to pay a lower rate for over the air broadcasters who also offer streaming services, a deal negotiated by the Radio Music License Committee.
Pandora had requested the royalty fee be reduced to 1.7%, however the court ruled they should pay 2.5% of their yearly revenue for the more than 8 millions songs they license through BMI. The judge went on to say that Pandora cannot be compared to a traditional radio station – which pays less than Pandora – nor can they be compared to an on-demand service like Spotify, which pays a higher rate.
Pandora is appealing the ruling.
In a related story, recording artists are getting together in the United States to support the Fair Play Fair Pay Act 2015 which will ensure artists are fairly paid when their songs are played on the radio and across other platforms. Artists and supporters are being encouraged to show their support to make sure the legislation gets passed. Supporters are gathering this Friday at the famous Whisky A Go Go on Sunset Boulevard in Los Angeles to sign the statement of support.