Pandora pays $90 million to settle suit over pre-1972 recordings, share value drops dramaticallyBy Shawn Knight
Internet radio provider Pandora has agreed to pay $90 million to record labels to settle a dispute over royalties on older songs.
ABKCO Music & Records, Capitol Records, Sony Music Entertainment, Universal Music Group and Warner Music Group accepted the settlement to close a case it opened in April 2014 regarding the playback of songs recorded before 1972.
As per the agreement, Pandora is "forgiven" for past plays of oldies and is given a pass through 2016. Once that time comes, the company will have to negotiate another licensing deal with record labels if it wants to continue playing classic tracks.
The record labels won a similar suite over the summer from satellite radio provider Sirius XM to the tune of $210 million.
Cary Sherman, chief executive of the Recording Industry Association of America, said the settlement was a significant milestone and a big win for the music community. Pandora chief Brian McAndrews said his company pursued the settlement in order to move the conversation forward and continue to foster a better, collaborative relationship with labels.
The news came alongside Pandora's quarterly earnings report in which it revealed a loss of $85.9 million on revenue of $311.6 million. Share value is down more than 33 percent as of writing.
Pandora isn't out of the woods just yet. As Ars Technica notes, the company continues to be engaged in a dispute with the Copyright Royalty Board regarding how much Pandora should pay per song. Earlier this week, an Illinois couple that owned multiple recording studios in the 1950s and 1960s filed suit against iHeartRadio, Pandora and SiriusXM.
Image courtesy Victor J. Blue, Bloomberg