Copyright Office Ruling Boosts Pandora, May Impact Streaming Royalty Rates

Shares of online streaming music service Pandora Media shown here.

The current CRB proceeding will determine what agreement replaces existing royalty rates and terms applicable to webcasters under terms of the Webcaster Settlement Act of 2009.

Update: Pandora has issued a statement saying that it has, in fact, received a favorable initial opinion from the Copyright office.

Pandora Media Inc. shares rose $1.07, or 5.4 percent, to $20.77 in afternoon trading Monday. Internet radio has urged a lower rate as it struggles to be profitable.

The company is trying to grab advertisers from traditional terrestrial radio while it faces pressure from Web rivals Spotify Ltd. and Apple Inc. A battle between a lean-back or lean-in style of music listening.And thirdly, Pandora has shown that the great bulk of its users are content to listen to ads rather than pay for a subscription to avoid them. It argued vehemently that the rates so decided were reasonable and should be considered as a benchmark.

Anthony noted, “Rate outcome depends on how much weight the judges apply to the Merlin (& Naxos) benchmarks vs. others”.

In August 2014 Pandora reached an agreement to negotiate royalty rates directly with independent music rights group Merlin, according to the Los Angeles Times.

Sophia Majlessi, a spokeswoman for SoundExchange, declined to comment.