Pandora has agreed to pay $90 million to record labels as part of a settlement designed to compensate the performers of songs created prior to 1972. The Recording Industry Association of America filed the suit on behalf of the labels and conglomerates ABKCO Music & Records, Capitol Records, Sony Music Entertainment, UMG Recordings and Warner Music Group.
“Major settlements with SiriusXM and now Pandora means that an iconic generation of artists and the labels that supported them will be paid for the use of their creative works,” RIAA Chairman and CEO Cary Sherman said in a statement.
“We pursued this settlement in order to move the conversation forward and continue to foster a better, collaborative relationship with the labels,” Pandora CEO Brian McAndrews said in the same statement. “Together we share a common objective to grow the music industry and support artists.”
The dispute this settlement resolves centers on a quirk of the U.S. copyright law created in 1972, when Congress voted to add sound recordings to the list of media protected under federal law. Anything recorded prior to February of that year, which happens to include some of the most iconic songs in the history of popular music, remained governed by state law, which in some cases provided a recording’s owner the right to license those songs for radio play. Since Pandora never sought a license from those rights holders, the dispute’s plaintiffs contended they were owed for those performances, which number in the untold millions since Pandora was founded in 2000.
This resolution in many ways mirrors one reached earlier this year between the RIAA and the satellite radio service Sirius XM, in which Sirius paid a group of labels $210 million both for its previous use of pre-’72 recordings and a license to stream them until 2022. It also bears similarities to separate class-action suits filed this summer by an indie label against the terrestrial radio giants iHeartMedia and Cumulus.
What exactly will happen to the money remains unclear. In the aftermath of the RIAA’s settlement with Sirius, one of the plaintiffs, Warner Music Group, said it would portion out money to its artists via SoundExchange, though the details of how that would be worked out were not clear.