Pandora buys Rapid City FM to qualify for broadcaster ASCAP license

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Issue Date: 
Jun 12 2013 - 1:50pm

From Issue:

Whether it will actually gain the cost-saving advantages it says it hopes to, or it's really just about making a (legal) point: Pandora has purchased an FM radio station.

According to a filing late yesterday, leading webcaster Pandora announced yesterday its acquisition of KXMZ-FM/Radid City, SD (market #255). The reason: Pandora hopes to qualify for the Radio Music Licensing Committee (RMLC) license for the use of copyright song compositions as to broadcasters.

Pandora is currently in a legal battle with ASCAP, the performance rights organization (PRO) that licenses copyright song compositions. (Usually in this newsletter we discuss sound recording copyrights -- administered by SoundExchange and nearly always owned by record labels. This is different.) Pandora accuses (and has filed a motion to this effect) ASCAP and music publishers of discriminating against it (and other webcasters) by withdrawing from the ASCAP license digital performance rights, for the purpose of "holding out" for higher fees.

ASCAP operates under an "antitrust consent decree" -- since it represents such a large segment of the music industry's publishing holdings, it needs to adhere to government guidelines in the way it operates. Pandora says ASCAP is violating the terms of that consent decree.

Pandora alleges the licensing deal made in January 2012 between the RMLC and ASCAP (as well as BMI, another PRO) discriminates against pureplay webcasters, because the deal gives AM/FM radio (including their Internet properties, e.g. Clear Channel and iHeartRadio) preferential licensing terms.

So, by buying a radio station in South Dakota (for $600k), Pandora wants to qualify for that same RMLC license. Is Pandora serious -- or is it about making a (snarky) point (which, given Pandora's economics, it could afford to do for $600k)? This likely tongue-in-cheek comment from a Pandora op-ed may be telling: 

"We look forward to broadcasting our personalized experience to the community in Rapid City, an area where over 42,000 residents already use Pandora," wrote Pandora assistant general counsel Christopher Harrison in The Hill's Congress Blog yesterday (here). Billboard also covers this story here.

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rapid

Pandora buys Rapid City. Why they bought the Rapid City. Without the help of Rapid City, they can easily get the broadcaster ASCAP license. Do they gain the cost saving advantage by doing this? I cannot believe this. Pandora is much better company. omni tech support

love it! very interesting

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Pandora's acquisition of KXMZ-FM...

A salute to the brilliant strategists at Pandora for (a) showing the hypocrisy being perpretrated by the NAB and the terrestrial radio and record industries against Pandora and Internet broadcasters and (b) stating that they are doing this not only for themselves but the entire family of Internet broadcasters. Pandora, now that you are a terrestrial broadcaster, you are now eligible to become a bona fide member of the NAB whose rules state that you must be a terrestrial broadcaster to become a member. I encourage you to do so and become "involved."

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