Ruling in Royalty Case Gives BMI a Victory Against Pandora

Pandora lost a battle with Broadcast Music Inc (BMI) over how much it should pay the licensing agency in royalties.

BMI sued in 2013 to raise the rate that Pandora pays to play the millions of songs in the BMI catalog. Pandora’s rate was set at 1.75 percent of its revenue; BMI asked the court to raise that to 2.5 percent, and Pandora argued for a rate as low as 1.7 percent. Judge Louis Stanton of United States District Court in Manhattan ruled for BMI, setting the rate at 2.5 percent. The full decision remains under seal, but the overall rate was disclosed by both parties. While the ruling is a victory for the music industry, which has fought bitterly against Pandora over royalty issues, the ultimate outcome in the case is unclear. A federal appeals court affirmed a ruling that had kept Pandora’s rate for Ascap, a rival licensing agency, unchanged at 1.85 percent, rejecting Ascap’s arguments to raise it.