Pandora Wins Appeals Court Ruling on Ascap Royalty Rates

In Pandora Media’s second victory against the music industry in a week, a federal appeals court affirmed a judge’s ruling about royalty rates for the millions of songs represented by Ascap.

Just two days after Pandora received a favorable decision from the Federal Communications Commission over its efforts to buy a South Dakota radio station -- a move that could allow Pandora to pay lower royalty rates to songwriters -- the United States Court of Appeals for the Second Circuit, in New York, affirmed a ruling from Judge Denise L. Cote of United States District Court in New York that set a rate of 1.85 percent for the public performance of songs in Ascap’s catalog for Pandora and other Internet radio services. In another issue that has roiled the music industry, the appeals court also agreed with Judge Cote about the way that music publishers can make deals with Ascap to represent their songs. Pandora’s case against Ascap -- a major clearinghouse for songwriting rights -- had been precipitated by the publishers withdrawing digital rights to their catalogs, a move that forced Pandora to negotiate directly with the publishers, and resulted in higher royalty rates. Judge Cote ruled that this violated the terms of the federal regulations, known as a consent decree, under which Ascap has operated since 1941.