Publishers Call BMI's Win Over Pandora a 'Small Fraction of What Music Creators Deserve'
While Pandora immediately denounced the finding by Judge Louis Stanton that it should pay 2.5 percent of revenue for the BMI blanket license and vowed to appeal, the music publishing community has praised the decision. Moreover, publishers also expressed their resolve to continue their fight against Pandora, which they accuse of trying to benefit economically at the expense of songwriters.
"It is a positive first step to the entire publishing and songwriting community that Judge Stanton ruled in favor of BMI, requiring Pandora to pay them a higher percentage of its revenue," National Music Publishers Association president David Israelite said in a statement. "While still a small fraction of what music creators deserve, this decision sends a clear message that Pandora cannot continue to get away with growing its business on the backs of struggling songwriters -- who deserve to be paid fair market value for their work."
ASCAP applauded Judge Stanton for citing market benchmarks, which ASCAP has long argued are relevant in these rate court proceedings. The market benchmarks consisted of deals cut by publishers like Sony/ATV and Universal Music Publishing Group, who had withdrawn their digital rights from the PROs' blanket licenses. Even though both judges in both rate courts subsequently ruled that the consent decrees under which both ASCAP and BMI operate don't allow for partial withdrawals, Stanton found that the direct deals cut by the withdrawing publishers were relevant benchmarks, regardless of them being signed "under duress," as Pandora maintained. This is the opposite opinion that Judge Denise Cote reached, who presided over the ASCAP/Pandora rate court trial and disregarded the direct deals, setting Pandora's ASCAP rate at 1.85 percent of revenue.
"This decision [the Stanton ruling on rates] is welcome news for music creators, but make no mistake, Pandora will stop at nothing in their ongoing effort to shortchange songwriters," ASCAP president and chairman Paul Williams said in a statement. "ASCAP and the music community must continue to fight for the urgent reforms needed to enable all songwriters, composers and music publishers to obtain fair compensation for the use of our music."
Finally, Sony/ATV, which administers EMI Music Publishing, issued a statement saying it was pleased by the decision. "While it is at the lower end of benchmark rates obtained in free market and arm's length negotiations between publishers and Pandora, the rate decision is a step in the right direction towards obtaining better royalty rates for our songwriters," the statement said. We reject, as the court did, Pandora's continued pretense that the agreements it voluntarily entered into with us during the time our digital rights were withdrawn from ASCAP and BMI were made under duress. We will continue our fight to obtain fair payment for our writers and hope that Pandora will come to recognize the value of the music that forms the very basis of their businesses."
The full ruling by Judge Stanton has yet to be released, as BMI and Pandora agree on what should be redacted from the public release. When such decisions are written, they often contain competitive data in making arguments to back the decision but the parties involved may not want such information disclosed.