Pandora Shares Reach Baritone Levels Following DoJ Review Of Songwriter Royalties

The

has opened a review to examine if Judgments in United States v. ASCAP, 41 Civ. 1395 (S.D.N.Y.), and United States v. BMI, Inc., 64 Civ. 3787 (S.D.N.Y.) ("Consent Decrees") meet their goal in protecting competition. Shares of

were down as much as six percent in pre-market trading on this review of rules concerning songwriter fees.

The Justice Department will review agreements as far back as 1941 that entail songwriter royalties. After recent court cases between rights holders and Pandora, the department announced that they will examine the consent decrees with two songwriting groups, the American Society of Composers, Authors and Publishers and Broadcast Music Inc. The U.S. Justice Department commented, “The department understands that Ascap, BMI and some other firms in the music industry believe that the consent decrees need to be modified to account for changes in how music is delivered to and experienced by listeners.”

In 2012, Pandora sued Ascap to seek a realistic rate for licensing fees to play their songs on its internet radio service. Although Ascap requested an increasing rate over time, the federal judge ruled that Pandora must pay 1.85 percent of revenue from 2011 to 2015. Last year, the songwriters group BMI sued Pandora requesting a “reasonable” loyalty for allowing their songs to be played. The proposed rate by BMI was rejected, but the case is pending.