What ASCAP Members Need to Know About the Pandora Rate Court Decision
As most of you know, Pandora began litigation against ASCAP's 500,000 songwriter, composer and publisher members in the fall of 2012, seeking a lower rate for public performance licenses. Under the terms of ASCAP's decades-old consent decree, ASCAP must grant a license to anyone who asks. When parties can't agree on the price for a license, a federal judge (or "rate court") decides the rate.
Judge Denise Cote has now issued her decision in the ASCAP-Pandora rate court proceeding, setting a rate of 1.85% of Pandora's revenues for each of the five years of the license term (2011-2015). ASCAP had proposed an escalating rate structure, asking 1.85% for each of 2011 and 2012, 2.5% for 2013, and 3.00% for each of 2014 and 2015. Pandora was seeking to reduce the current rate to 1.7%, the rate paid by traditional radio stations under the Radio Music License Committee agreement.
SONGWRITERS DESERVE MORE
While the court rightly recognized the need for Pandora to pay a higher rate than traditional radio, ASCAP strongly believes that songwriters deserve more.
"Streaming is growing in popularity - and so is the value of music on that platform," said ASCAP CEO John LoFrumento. "Recent agreements negotiated without the artificial constraints of a consent decree make clear that the market rate for Internet radio is substantially higher than 1.85%."
Songwriter and ASCAP President Paul Williams said:
"The rate court's decision preserves the status quo, which is unacceptable for the thousands of songwriters and composers who depend on ASCAP royalties for their livelihoods. Unfortunately, it is now more clear than ever that it is time to update the laws that regulate how songwriters and composers license our works to make sure the next generation of songwriters is paid fairly regardless of how listeners enjoy their music. That's why ASCAP is leading the charge for reform."
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A MODERN MUSIC LICENSING SYSTEM
The bottom line is we need to take a fresh look at the system that regulates music licensing, including the outdated ASCAP consent decree, to make sure it reflects the realities of today's music marketplace and consumer behavior.
That's why ASCAP is talking to stakeholders throughout the music industry, trying to build consensus around how we can create a more efficient, effective and modern music licensing system – one that better serves not only ASCAP members, but also music licensees and music fans everywhere.
There are some encouraging developments:
- There is a growing consensus around the importance of music licensing reform
- Last month, the Songwriter Equity Act was introduced in Congress, aimed at amending US copyright law so that songwriters are able to earn fair rates
- US Register of Copyrights Maria Pallante has said "the time has come to re-examine the consent decrees"
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ASCAP will continue to be on the frontlines in the fight for fair compensation for songwriters and composers in the digital age. But we need your help. We encourage you to visit our Advocacypage for the latest news and information about how you can get involved in the campaign for music licensing reform.
Working together, we can build a more sustainable future for music – one in which songwriters and composers can thrive alongside the businesses that revolve around our music.
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