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Weil Secures Favorable Trial Ruling for Pandora Media in Sound Recording Royalty Rate Proceeding

On December 16, 2015, Weil obtained a major victory for Pandora Media when the Copyright Royalty Board (CRB), a three-judge panel in Washington, D.C., set resoundingly favorable sound recording royalty rates for Pandora and other “non-interactive” webcasters (i.e., not on-demand services) for the 2016-2020 license period. In this proceeding, the recorded music industry, through their industry organization, SoundExchange, had sought fees that would have increased the webcasters’ royalty rate by nearly 80% in the first year and escalate it even further thereafter. The Copyright Royalty Board instead awarded only a very modest increase over the webcasters’ present royalty levels, closer to the webcasters’ proposed rate structure. Specifically, the court set “per performance” rates at $0.0017 for Pandora’s ad-supported service and $0.0022 for Pandora’s subscription service. SoundExchange also had requested a royalty floor of 55% of revenues, but the Board declined to include any percentage-of-revenue component at all. The difference between the fee award and the royalties sought by the record labels will be billions of dollars over the term of the license for Pandora alone.

The trial commenced on April 27 and lasted until June 3. The judges heard oral testimony from 47 witnesses, including 16 different experts. Sirius XM, iHeart Media, the National Association of Broadcasters, and several other parties participated in the hearing as well.

The trial team was led by partners R. Bruce Rich, Benjamin Marks, and Todd Larson and included counsel David Yolkut and associates Reed Collins, Elisabeth Sperle, Jennifer Ramos, Christopher Luise, Daniel Cohl, Gaspard Rappoport, and William Brewer.