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December 20, 2013

ASCAP Comments on BMI Rate Court Ruling

On December 18th, US District Court Judge Louis Stanton issued a ruling denying Pandora’s motion for summary judgment in the streaming music company’s rate court proceeding with BMI. Just three months ago, US District Court Judge Denise Cote granted a similar motion by Pandora in its rate court proceeding with ASCAP, on the grounds that “new media transmission” rights can only be withdrawn from ASCAP if a publisher resigns from ASCAP completely. But in yesterday’s ruling, Judge Stanton determined that, with the exception of “presently-existing licenses,” if a music publisher elects to withdraw “new media transmission” rights from BMI, those works are no longer “within BMI’s repertory, and it lacks the power to license them to any applicant, including Pandora.”

This means that as existing licensing deals expire, BMI no longer has the right to represent publishers who have withdrawn new media rights for any purpose across all platforms. According to Judge Cote, publishers are “all in” unless they resign from ASCAP completely; conversely, Judge Stanton has decided that publishers are “all out” if they have withdrawn new media rights from BMI.

In response to this latest ruling, ASCAP CEO John LoFrumento issued the following statement:

"The Court’s recent decision in the BMI-Pandora case further demonstrates the need to review the decades-old consent decrees, which govern PRO licensing, to ensure they reflect the realities of today’s music landscape.

Despite Pandora’s continued push to pay songwriters, composers and music publishers less than a fair market rate for use of their works, collective licensing remains the most effective and efficient way to encourage innovation and increase consumer choice in the marketplace while ensuring music creators are fairly compensated for their work.

We firmly believe ASCAP is uniquely positioned to serve the needs of music creators and music licensees in the digital future. But we must bring the regulatory framework that governs how we do business up to pace with innovation that is revolutionizing the music landscape. A music licensing system that reflects advances in technology, changes in end-user behavior and an evolving competitive landscape will better serve all stakeholders. ASCAP is working to shape a future in which everyone wins – consumers, music delivery platforms and the songwriters, composers and music publishers who are the foundation of the music eco-system."

Visit our Advocacy/Legislation page to find out how ASCAP is protecting songwriters and composers in the digital age.