Pandora Doesn’t Want to Pay for Music Made Before 1972

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Source: Thinkstock

Source: Thinkstock

Recording companies including Sony (NYSE:SNE), Comcast (NASDAQ:CMCSA)-owned Universal, Time Warner’s (NYSE:TWX) Warner Music, Capitol Records, and the independent label ABKCO filed a suit in New York State Supreme Court in Manhattan against the popular online radio service Pandora (NYSE:P) over recordings made before 1972, which aren’t protected under the same copyright laws as recordings made after that year. Federal copyright law doesn’t cover recordings made before 1972, though they are protected through various state laws. The record companies allege that they aren’t being properly compensated for the pre-1972 music they own.

Pandora believes that those state laws adequately protect the music in question. “Pandora is confident in its legal position and looks forward to a quick resolution of this matter,” said a Pandora spokesman in a statement seen by Bloomberg Businessweek. This is only the latest in the online radio service’s battle to pay as little as possible in royalties for the music it offers.

“Pandora’s refusal to pay Plaintiffs for its use of [Pre-72] recordings is fundamentally unfair. Pandora’s conduct also is unfair to the recording artists and musicians whose performances are embodied in Pre-72 Recordings, but who do not get paid for Pandora’s exploitation of Pre-72 Recordings. It is also unfair to other businesses that compete with Pandora but obtain licenses and pay for the right to stream Plaintiffs’ Pre-72 Recordings to the public, while Pandora does not,” the suit reads. “As a result, Pandora deprives Plaintiffs and their artists of compensation, while profiting enormously from and gaining an unfair advantage over others who do pay to copy and publicly perform Plaintiffs’ Pre-72 Recordings.”

A similar lawsuit over compensation for pre-1972 music was filed against SiriusXM Satellite Radio (NASDAQ:SIRI) in California back in September. “The conduct of SiriusXM presents the paradigmatic example of a commercial business that is based on, uses, and profits from the intellectual property created by and owned by others, without obtaining the right to do so, and without paying for it,” the complaint reads.

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