Pandora acquisition of radio station KXMZ challenged with FCC block request

Jul 29, 2013
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Last month, we reported that - as part of an ongoing battle between Pandora and the music industry - the Internet radio company would acquire terrestrial radio station KXMZ in order to get an RMLC license. The ultimate goal in the business move would be scoring the lower royalty rates that its competitors enjoy. The ASCAP has long bucked against Pandora's efforts, and this acquisition is no different: a request has been made for the FCC to block the purchase.

Says ASCAP in the filing: "Pandora is buying KXMZ for one reason - to argue that it is entitled to pay lower music performance royalties to composers, songwriters and lyricists for its billions of online-only internet music streams ... Moreover, Pandora's acquisition of KXMZ would not serve the public interest ... The application should be denied."

According to various statements made by Pandora, the purpose of purchasing a terrestrial radio station is to get the same lower rates that ASCAP provides for competitors, such as iHeartRadio, due to their ownership of terrestrial stations, which have different rates than Internet stations. As we stated last month, Pandora considers this a violation of the Department of Justice decree it is supposed to follow.

Later in June, Pandora's founder Tim Westergren posted a lengthy statement on the company's blog regarding the issue, including what he considers to be lies created by the music industry's "hired guns." Statements such as Pandora's desire to decrease royalties by 85-percent, said Westergren, were complete lies created for the purpose of causing the company problems.

Following this, Westergren went on to discuss the issue between spins and plays, whereas a play on a radio station is listened to by many, while a spin is a song listened to by one user. As such, says Westergren, it could take many spins to equal a single play, and such is the nature of contention between what Internet radio stations should have to pay in royalties.

The Petition to Deny was filed by ASCAP on July 25.

SOURCE: TechDirt


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