Last Friday, November 21, BMI rate court judge Louis L. Stanton, ruled against Pandora’s motion on a license-in-effect with the performance right society.
Billboard reported that the judge said that there was no license-in-effect because Pandora was not yet a license holder. BMI senior VP and general counsel, Stuart Rosen, confirmed that though Pandora could use the music, the digital service was still an applicant for a license and would not become a license holder until the rate and length of the deal were determined.
Pandora argued that it needed Stanton to rule on a motion that the service possessed a license-in-effect because, without the order, Pandora’s blanket license would be less-valuable than every other licensee that has come before BMI’s rate court. Furthermore, the digital service contended that BMI and its publishing affiliates have used a license-in-effect stance once a license is issued to a digital service. When the PRO issued this license, all BMI repertory would be locked in so when publishers contemplated withdrawal for licenses to digital services, ongoing licenses were protected and only expiring licenses were allowed for debate.
Beyond these points, Pandora argued that the PROs would also benefit from the license-in-effect stance because it would provide stability for its members by helping the companies to “allocate costs among affiliates while locking in steady royalty streams.” Pandora pushed that it would be “senseless to allow BMI to change the nature and scope of the license.”
Pandora’s rate trial to determine the rate and length of their license from BMI has been scheduled to begin February 9. The parties will negotiate how to deal with publishers leaving BMI and how that will impact the decided rate.