Just 2 days after Pandora bought a small South Dakota radio station in an attempt to lower the rates it pays for streaming music online, BMI has filed a lawsuit asking a federal court to allow the performing rights organization to negotiate "market driven" rates rather than charge the current stuatory rates. In recent months, Sony ATV and EMI Publishing have pulled their digital rights from BMI and ASCAP to negotiate directly.
"The breadth of music played by Pandora is staggering compared to broadcast radio stations, making a blanket license even more valuable," BMI says in the filing. "Pandora has embarked on a significant campaign to lower its royalty fees."
"Pandora's stunt makes a mockery of performing rights licenses"
Pandora bought the radio station this week because over the air broadcasters pay lower royalty rates for online streaming then internet only companies. "Pandora's stunt makes a mockery of performing rights licenses and the rate court process," according to BMI
In arguing for the lower rates, BMI wrote: "Because of the significant fees paid by terrestrial radio stations for their terrestrial broadcasts, BMI was willing to accept a lower rate for RMLC stations' new media transmissions...Terrestrial radio stations pay on average $150 million per year to BMI, with only a small fraction of those fees coming from new media transmissions by those stations."
BMI represents more than 600,000 songwriters, composers, and publishers with more than 7.5 million works.