Today in Manhattan, pioneer streaming giant Pandora is set to meet licensing agency BMI in court to settle a dispute over current royalty rates. The trial will determine how much Pandora pays BMI’s songwriters and music publishers to stream their songs. According to the New York Times, Pandora currently pays BMI 1.75 per cent of its revenue, but wants to reduce that to 1.7 per cent to match that paid by most radio stations. However, BMI wants the rate raised to 2.5 per cent, claiming Pandora is a more interactive form of media. "This is why the rate court system was established – to adjudicate exactly these types of disputes,” said Pandora spokesman Dave Grimaldi.
“The foundation of Pandora’s business was built with the words and music of songwriters, and we are fighting on their behalf to secure rates that reflect the true value of their work in today’s digital marketplace,” said BMI’s general counsel Stuart Rosen.
This isn't the first time Pandora has entered the courtroom in the name of royalty rates. Just last year ASCAP called the streaming company to task, seeking an increase in royalties paid. Pandora, seeking the instatement of a lower royalty rate, was forced to maintain their existing royalty rate of 1.85% for a 5 year period.
If this case proves to be more of the same, Pandora might find itself settling in at a rate of 1.85%.