March 14 (Bloomberg) -- The license rate Pandora Media Inc. must pay to use songs registered with the American Society of Composers, Authors and Publishers for 2011 to 2015 was decided by a federal judge -- who sealed the order from public view to give the parties advance notice of her decision.
Pandora, the biggest Internet radio service, sued in 2012 asking the court to set “reasonable” fees for licensing with Ascap, which protects performance rights for songwriters and music publishers. U.S. District Judge Denise Cote in Manhattan today filed a notice of her decision and gave the parties until March 18 to decide what portions should be redacted before releasing it to the public.
Lauren Iossa, an Ascap spokeswoman, said in an e-mailed statement that the judge set Pandora’s rate for the license at 1.85 percent of revenue, more than the 1.7 percent sought by Pandora. Will Valentine, a spokesman for Oakland, California-based Pandora, said the company is aware of the filing and wouldn’t comment on it until it’s released to the public.
“Streaming is growing in popularity -- and so is the value of music on that platform,” Ascap CEO John LoFrumento said in a statement. “We are pleased the court recognized the need for Pandora to pay a higher rate than traditional radio stations.”
Traditional radio stations agreed to pay 1.7 percent of revenue for playing Ascap works under a settlement approved in January 2012.
Pandora said in its 2012 suit that fees charged at the time made sustained profitability impossible under its agreement with the 470,000-member group. New York-based Ascap and Pandora reached an “experimental” fee accord in 2005 that lasted until 2010 and couldn’t agree on new rates after more than a year of talks, Pandora said in its complaint.
Under the terms of the federal consent decree that resulted from a 1941 lawsuit against Ascap, the federal court in Manhattan has jurisdiction over rate-setting if parties can’t come to terms. Cote presided over a trial to set the rates that began in January.
The case is In re Petition of Pandora Media Inc., 12-cv-08035, U.S. District Court, Southern District of New York (Manhattan).