While Pandora is maneuvering to lower its music publishing rates, it has cut a short-term deal with Universal Music Publishing Group that according to sources would represent the highest rate the Internet webcaster has ever paid to the music publishing sector.
The new deal, however, could get killed by the ASCAP rate court, which is expected to rule on a motion by Pandora that argues publishers can’t cut direct deals because they are still operating under an ASCAP consent decree. Therefore, UMPG and others seeking direct deals are still obligated to accept whatever rate the court sets for ASCAP for the current licensing period set to expire on Dec. 31, 2015.
ASCAP and BMI operate under consent decrees, meaning once a service wants to license their music, they can play the music immediately, even if they have yet to agree to terms. Pandora terminated its license with ASCAP in 2010 and asked for a new deal beginning Jan. 1, 2011, through Dec. 31, 2015. According to Pandora’s viewpoint, that coverage includes all music publishers that midway-through the term now are seeking or have cut direct digital deals.
Meanwhile, sources say UMPG is being paid at a pro-rata share of a percentage of Pandora revenue that is substantially higher than the 4.3 percent it paid to publishers in its most recent fiscal year. Sources speculate that UMPG and the other large publishers seeking direct deals may have benefitted by the 10 percent rate that publishers will get from Apple’s iTunes Radio service. http://umpg.com.
