Pandora Media Inc (NYSE:P) lost one of its major battles over the resolve of how copyright owners and musical artists will be rewarded for their work.
The internet radio giant lost the decade-long battle after a New York court ruled against its favor on Thursday. Instead, Broadcast Music Inc won the fight when the court granted their request for Pandora to increase its payments from 1.75% to 2.5%.
BMI had had a comprehensive list of famous songwriters such as Sam Smith, Lady Gaga, Miranda Lambert, among others. The new increase is expected to raise the amount of money that BMI receives from Pandora. The increase is not expected to be too much, but it will definitely go up by a few millions. Almost half of the online radio’s revenue goes to the right holders inclusive of the music publishers and the record labels.
So far, the company has 79 million subscribers who pay subscription fees for the services. BMI on the other hand benefits from royalties that it collects on behalf of its members for use of their songs. So far, BMI has over 650,000 publishers, composers, and songwriters. The court decision came as an important victory for the organization the members it represents.
The win for BMI came after Pandora had previously emerged victorious in two separate legal matters. The FCC recently gave Pandora the go sign to acquire a radio station from South Dakota. The online radio company hopes to use this win to argue that it deserves to pay fewer loyalties to BMI and ASCAP.
Parties in support of higher royalties argue that the acquisition should put the company in a better position to pay more loyalties because of the increased revenue streams. The company bought into the South Dakota radio station following the approval of the FCC back in 2003.
Despite the recent decision by the court on Thursday, Pandora Media Inc (NYSE:P) has plans to fight back and appeal against the ruling.
