Originally posted 2014-11-17 11:00:19.

By Christina Severino | amdlawgroup.com

pandoraA 2013 decision by New York federal judge Louis Stanton has prompted digital media outlets, namely Pandora Radio, to seek advice how to proceed if their licensing rights were to be taken. Judge Stanton ruled that if major music publishers decide to withdraw performance licenses, they must withdraw fully, not just partially to avoid online digital streaming companies. This decision resulted after Sony/ATV and EMI modified their consent decrees with BMI, which would have terminated digital licensing rights. BMI is currently the largest music rights organization in the United States. BMI assured Pandora that major music publishers such as Universal Music and Sony/ATV will not be withdrawing their song catalogues and performance licenses to online music streaming companies through the end of this year. Since then, Pandora made agreements with music publishers, but they paid a premium for the direct licensing rights, compared to the rates they once paid when their deals were struck with BMI’s backing. This direct licensing would also guarantee that they would not be sued by the publishers during the contract period. Even though the publishers cancelled their initial withdrawals as a result of the new deals, this still does not provide safe harbor for Pandora once January 2015 rolls in.

As a result of this case, the Department of Justice has reported that it will begin reviewing the consent decrees of BMI and the ASCAP (The American Society of Composers, Authors and Publishers). If the DOJ decides that the process of drafting consent decrees with the BMI or the ASCAP is no longer effective, then this will potentially open the door for individually owned management companies who will likely benefit from the additional profits from direct licensing.

Resources: http://www.hollywoodreporter.com/thr-esq/bmi-advises-pandora-big-publishers-745763

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