Pandora to pay $90 million in settling royalties lawsuit over pre-1972 recordings

Posted:
in General Discussion edited October 2015
Pandora has reached a $90 million settlement with record labels over royalties from pre-1972 recordings, which were under contention because they don't fall under U.S. federal copyright protections.




Several members of the Recording Industry Association of America -- Capitol Records, Sony, Universal Music Group, Warner Music Group, and ABKCO Music -- had charged instead that Pandora was violating New York state law by publicly performing the recordings, according to Billboard. As precedent for their lawsuit the record labels relied on 2014 rulings in California and New York, which said that pre-1972 works could be protected at the state level.

The exact terms of the settlement are confidential, but a Sony source told Billboard that the label intends to share proceeds with artists in a way similar to SoundExchange, which often handles industry royalties. A Warner spokesperson said the company would use SoundExchange directly, and a separate source claimed the same about Universal.

While fighting the lawsuit, Pandora asked to see artist contracts, arguing that if it were unfair to play recordings without paying every artist, there would be a provision for performance royalties in every recording contract. Label lawyers countered that the only important issue was payment to artists, and noted that ABKCO makes sure all of its artists are paid for digital streaming regardless of individual contracts.

Similar lawsuits are being leveled at terrestial broadcasters such as CBS Radio, iHeartMedia, and Cumulus. Sirius XM reached a $210 million settlement with the RIAA in June.

In January, Zenbu Magazines filed lawsuits against companies like Apple, Google, Rdio, and Sony over the same matter. In Apple's case action was directed against Beats Music, which is in the process of merging into Apple Music.

Comments

  • Reply 1 of 13
    Pandora will be gone in a year. Two years at the most.
  • Reply 2 of 13
    chadbagchadbag Posts: 1,999member
    IINAL and all that but it would seem that they (labels) would have to show that the pre-72 works were streamed in NY and only those ones streamed in NY could be the subject of the suit since it was under NY law?
  • Reply 3 of 13
    mike1mike1 Posts: 3,275member
    Quote:

    Originally Posted by chadbag View Post



    IINAL and all that but it would seem that they (labels) would have to show that the pre-72 works were streamed in NY and only those ones streamed in NY could be the subject of the suit since it was under NY law?

    And California apparently. Probably not a song in question that was not streamed to a user in one of those two states.

  • Reply 4 of 13
    What a surprise, New Yuck and Crappifornia were at fault here.
  • Reply 5 of 13
    chadbagchadbag Posts: 1,999member
    Quote:

    Originally Posted by mike1 View Post

     

    And California apparently. Probably not a song in question that was not streamed to a user in one of those two states.




    But ONLY the streams that went to NY (not California unless a separate suit was brought since it was brought under NY law in a NY state court) would be liable.  A stream of a song streamed to Florida would not be liable even if the same song was streamed to NY.  (As they pay per stream I understand).

  • Reply 6 of 13
    lkrupplkrupp Posts: 10,557member
    Quote:

    Originally Posted by SpamSandwich View Post



    Pandora will be gone in a year. Two years at the most.



    Followed by Spotify. We are inundated here with Spotify fanboys and Apple Music haters predicting gloom and doom for the Apple service but Spotify has a very shaky business model with the majority of their customers being freeloaders. How many of those 6.5 million Apple Music paying subscribers are former Spotify paying subscribers now? The juggernaut has just launched so let’s check back a year from now. I’m betting the Apple Music naysayers will be crying in their beer. I absolutely love Apple Music, so much so that I canceled our SirusXM service for our automobile. I can get all the music I like plus various talk channels right on my iPhone. 

  • Reply 7 of 13
    I wonder what the record labels would do if Pandora removed all pre-1972 music from its catalog? Does it have the conviction to just walk away from a losing proposition? With the record labels facing the prospect of earning $0 from Pandora after this current deal, maybe the record labels would reconsider financially raping Pandora by dropping streaming fees by $12.5 - $15 million. Just a thought.
  • Reply 8 of 13
    trumptmantrumptman Posts: 16,464member
    Quote:

    Originally Posted by SpamSandwich View Post



    Pandora will be gone in a year. Two years at the most.

     

    I'm going to disagree. 

     

    Quote:

    Originally Posted by lkrupp View Post

     
    Quote:
    Originally Posted by SpamSandwich View Post



    Pandora will be gone in a year. Two years at the most.



    Followed by Spotify. We are inundated here with Spotify fanboys and Apple Music haters predicting gloom and doom for the Apple service but Spotify has a very shaky business model with the majority of their customers being freeloaders. How many of those 6.5 million Apple Music paying subscribers are former Spotify paying subscribers now? The juggernaut has just launched so let’s check back a year from now. I’m betting the Apple Music naysayers will be crying in their beer. I absolutely love Apple Music, so much so that I canceled our SirusXM service for our automobile. I can get all the music I like plus various talk channels right on my iPhone. 


     

    I'd agree with your sentiment if you declared SiriusXM was going to be gone in a year. That is a service that this type of product has undercut in terms of costs and also in terms of what is necessary to keep it rolling. The other services though have been doing it better and doing it longer. Plus I'd love to believe Apple will continue to improve here but most of their recent software developments have gotten to a finished product and then sort of just let it languished there. This has been true of iWorks, iBooks, Garage Band, etc. Most of their software development OUTSIDE of operating systems just feels like it is dying on the vine. 

  • Reply 9 of 13
    Quote:

    Originally Posted by SpamSandwich View Post



    Pandora will be gone in a year. Two years at the most.

    The stock is down 35% after-hours.

  • Reply 10 of 13
    zoetmbzoetmb Posts: 2,654member
    Quote:

    Originally Posted by TheWhiteFalcon View Post



    What a surprise, New Yuck and Crappifornia were at fault here.



    So you think that Pandora (and others) should not have to pay performance royalties on pre-1972 recordings?   That it's okay for companies to make money without compensating the artists?

     

    But it's actually Congress who is at fault.   There should have been a provision for pre-1972 recordings when the performance right was created.   

  • Reply 11 of 13
    The stock is down 35% after-hours.

    Anyone convinced Pandora will stick around would do well to buy up that plummeting stock. I certainly won't touch it.
  • Reply 12 of 13
    trumptmantrumptman Posts: 16,464member
    Quote:

    Originally Posted by zoetmb View Post

     
    Quote:
    Originally Posted by TheWhiteFalcon View Post



    What a surprise, New Yuck and Crappifornia were at fault here.



    So you think that Pandora (and others) should not have to pay performance royalties on pre-1972 recordings?   That it's okay for companies to make money without compensating the artists?

     

    But it's actually Congress who is at fault.   There should have been a provision for pre-1972 recordings when the performance right was created.   


     

    They were compensated for a number of years. After those number of years, the works are supposed to enter the public domain. 

    Quote:

    Originally Posted by SpamSandwich View Post

     
    Quote:

    Originally Posted by anantksundaram View Post



    The stock is down 35% after-hours.




    Anyone convinced Pandora will stick around would do well to buy up that plummeting stock. I certainly won't touch it.

     

    I'm glad you mentioned it. I'll probably buy $1000 worth of it on Monday. It's the sort of fun bet that might pay off.

  • Reply 13 of 13
    trumptmantrumptman Posts: 16,464member

    Crap I wished I'd remembered my desire to play with this stock earlier in the day. By the time I checked on it around 11:00 AM PST, it was up over 5%.

     

    Still going to slap some cash down and see how it does.

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