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Litigation Over Streaming Music Royalties Gets Crowded

Now BMI, too, sues Pandora over royalty rates

Pandora now has more litigation to worry about.

BMI has sued Pandora, petitioning a federal court in New York to make the Internet audio music service pay its current music royalty rate through the end of the 2014 contract.

The BMI lawsuit states Pandora paid 4.1% of revenue to publishers last year, but has continued to seek a lower rate. Without specifying a dollar amount, BMI says it’s proposed an increase in Pandora’s rate “consistent with market rates to reflect the explosive growth of the Internet music streaming marketplace, and the changes in the publishing landscape brought about by withdrawal of rights by publishers who are not satisfied with the depressed level of current public performing rights fees.”

BMI says in the suit that Pandora’s recent purchase of a radio broadcast station in South Dakota in order to qualify for a broadcast performance royalty rate is a “brazen” and insincere effort to lower its rates.

ASCAP and Pandora are already embroiled in a similar performing rights lawsuit, we’ve reported.

Referencing the ASCAP dispute in the petition, BMI tells the court: “We expect Pandora to claim that it is no different than commercial broadcast radio. This contention is wrong.” Pandora does not play one song at a time, like regular stations, asserts BMI, but has aired 200 million songs by 10 a.m. each morning.

Pandora said in a statement such disputes are typically settled in court and the company looks “forward to the court’s oversight of this matter.”