ArtsWatch: Pandora Sues ASCAP For Lower Rates

Streaming service escalates fight to cut compensation to music's creators
November 12, 2012 -- 9:56 am PST
By Philip Merrill /

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Pandora Asks Court To Order Lower Blanket License
On Nov. 5 Pandora discontinued rate-setting negotiations with ASCAP and filed suit against the performance rights organization in the Southern District of New York's U.S. District Court, the designated jurisdiction for stalled rate-setting discussions. Requesting a lower blanket licensing fee, the streaming radio service argued that ASCAP was inflexible, had negotiated more favorable rates for radio, and could potentially lose new media rights to represent large music publishers. Fundamentally, Pandora is a major music distribution platform seeking to lower corporate costs and improve profitability. To reduce royalty rates on the artist and label side of its music licensing, Pandora has helped push for the Internet Radio Fairness Act, legislation The Recording Academy opposes. "Since becoming a publicly traded company, Pandora's actions have consistently demonstrated less and less respect for the very music creators who make their business possible," said Recording Academy President/CEO Neil Portnow. "Their most recent attempts to lower rates paid to ASCAP songwriters comes on the heels of their lobbying Congress this fall to pay artists a below-market royalty. We oppose this legislation as well as any attempt to lower songwriter royalties. Pandora should not be allowed to increase its shareholders' profits at the expense of songwriters and artists."

Twitter To Track Antipiracy Takedowns
In the interests of Internet transparency, Twitter announced its new antipiracy policy on Nov. 3 to withhold Tweets targeted by Digital Millennium Copyright Act takedown notices rather than having them completely removed. The policy provides notice of the antipiracy action while the Twitter account holder decides whether to file a challenge in response that could result in the Tweet's original content being reinstated. Consumer advocates were pleased by the move. Sherwin Siy, Public Knowledge vice president of legal affairs, said, "It's important that we have a record of how the DMCA is being used and abused over the years since its passage and, hopefully, the Twitter takedowns will contribute a lot to understanding how well the law is working."

Google Search Results Still Promote Pirate Sites
On Nov. 5 published the results of 32 Google searches — using combinations of names of famous music artists followed by the term "MP3" — providing a fresh evaluation of how links to illegal content are placed before links to legal sites or MP3 stores. The evaluation follows the search giant's Aug. 10 announcement that websites receiving the most DMCA takedown notices would be pushed further down in its search results. Google's typical search results page shows 10 links. found the top legal site ranked 7.9 on average, toward the bottom of the first page of results. The top legal MP3 store came in at an average rank of 11.75, near the top of the second page. Scrutinizing Google's Transparency Report on DMCA takedowns, found the infringing site that almost always ranked first in search results was only 23rd on the list of sites ranked by number of takedown notices. With more than 14 million total takedowns over the past year, MP3skull only accounted for 3.6 percent of them. In a crowded field of infringing sites, a half-million takedowns is small enough in Google terms that MP3skull managed to avoid being pushed below its present top position. This is not your father's Whack-A-Mole — medium-size moles now have a much better chance of making it to the big leagues.

"Jobs, Jobs, Jobs" Even After The Election — And After The Movie
Speaking to Deadline Hollywood, 20th Century Fox Film Chairman/CEO Jim Gianopulos credited newly re-elected Vice President Joe Biden with suggesting a new antipiracy finale to films, quantifying the jobs and hours dedicated to each movie's production. The studio put this into practice on Taken 2, which opened early last month. For example, the message viewers saw while watching the final credits of Chasing Mavericks was: "The making and legal distribution of this film supported over 14,000 American jobs and involved over 600,000 work hours." Chris Aronson, 20th Century Fox executive vice president said, "I think it's a fantastic initiative and am glad we are doing it. More should." Gianopulos said, "We thought it was an excellent suggestion and adopted the idea and will continue for all movies going forward."

The Recording Academy actively represents the music community on such issues as intellectual property rights, music piracy, archiving and preservation, and censorship concerns. In pursuing its commitment to addressing these and other issues, The Recording Academy undertakes a variety of national initiatives. ArtsWatch is a key part of an agenda aimed at raising public awareness of and support for the rights of artists. To become more involved, visit Advocacy Action @ and sign up for Advocacy Action E-lerts.

Click on the "ArtsWatch" tag for links to other GRAMMY News stories in this series.

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