Pandora acquires terrestrial radio station KXMZ in order to nab RMLC license

It's no secret that there's some contention between Pandora and the powers that be over how much it pays for every song its users listen to, with the Internet radio station feeling it pays too much, and with the American Society of Composers, Authors and Publishers, more commonly known as ASCAP, frequently trying to raise royalty rates.

Pandora's Assistant General Counsel took to The Hill today, writing up a detailing of its latest legal battle with ASCAP, as well as a move it has taken in order to secure some of the same benefits its competitors have: the acquisition of a terrestrial radio station in South Dakota called KXMZ. Such an acquisition gives it the ability to have a Radio Licensing Marketing Committee license, something its competitors already take advantage of.

This is because, according to Pandora, terrestrial broadcasters scored "preferential treatment" in January of 2012, when an agreement was made between ASCAP and BMI and the Radio Licensing Marketing Committee. Pandora had not previously been able to get an RMLC license, but 16 of its competitors were, giving them a leg up.

In one specific case cited, iHeartRadio, which is one of Pandora's competitors, was granted license under terms that Pandora was denied because it is a service owned by a terrestrial broadcaster. Also detailed is the legal battle the Internet radio service is currently undergoing over what it says is a violation of a Justice Department antitrust decree via discrimination, refusing to list the name of songs in such a way that Pandora risked massive fees, and following in line with that second item, creating a "scheme" that lets publishers deprive Pandora of songs it provides to its competitors.

Beyond using the acquisition to get an RMLC license, Pandora's Christopher Harrison also said that such a purchase "makes sense," and that the service will provide Rapid City with personalized music based, in part at least, on the information it has about listening habits of local Pandora users. This represents the first time Pandora will be stepping beyond its Internet platform.

SOURCE: The Hill