Pandora is about to settle and pay the major labels for playing pre-1972 recordings but not paying royalties for their broadcast, according to a story in the New York Post.
In the U.S. there is no performance right and thus no performance royalty payment for records when they are played on the radio or in movie theaters, stores, restaurants, hotels and bars. But when the digital radio format emerged, record labels managed to secure a performance right for those broadcasts.
However, SiriusXM and Pandora have taken the position that, since the federal master recording copyright wasn't created until 1972 -- regardless of their status as digital broadcasters -- they don't have to pay on pre-1972 recordings.
Record labels and artists, however, have argued that those pre-1972 masters are due royalties because of individual state copyright laws. The Turtles, who own their masters, were the first to sue SiriusXM, and then Pandora, for royalty payments, citing state laws in California and New York. The majors soon followed suit. So far, SiriusXM has settled with the majors, agreeing to pay $210 million. If the Post is correct, Pandora is now about to make a settlement too, to the tune of $90 million.
However, a Pandora spokesman said, "We don't comment on rumor and speculation."
WMG and UMG did not immediately respond to a request for comment. The RIAA refused to comment.