Broadcast Music Inc (BMI) filed an action in New York City today asking the Federal Rate Court to set royalty fees for internet radio service Pandora on behalf of the organization’s 600,000 songwriters, composers and music publishers. The action asks the court to set reasonable, market driven fees for Pandora after negotiations did not result in an agreement. BMI represents the public performance copyright interest of its affiliates when their works are played across all venues including the internet, cable, broadcast television and radio, satellite and in nightclubs, bars and other commercial establishments. BMI negotiated the first music industry blanket copyright license agreement for the performance of music online in 1995. Today, there are approximately 10,000 digital properties covered by BMI licenses. This is the first time the organization has resorted to litigation on fees in the digital arena in the 18 years since it signed the first music industry copyright license for the performance of music on the internet.
Pandora, which has been operating without a license since 1/1/13, has yet to respond to the suit, but issued a statement saying it “values and respects those who create music and seeks to pay a rate that is fair to all artists [but] fairness needs to account both for what artists receive and what Pandora’s competitors are asked to pay.” Citing a recent agreement between the Radio Music Licensing Committee (RMLC) and ASCAP that offered lower licensing rates for broadcast radio, Pandora said that “this is not a case of Pandora trying to pay less [but] a case of publishers discriminating against Pandora.”