While revealing its Q3 earnings earlier today, Pandora announced that it will pay $90 million to labels in royalties as a settlement to play music released prior to 1972. Federal copyright laws didn’t start protecting sound recordings until 1972, meaning that copyrights of clips released prior to then are governed by state laws (via WSJ).
Pandora stopped paying royalties on pre-1972 music a few years back and was subsequently sued by the Recording Industry Association of America. Pandora says that pre-1972 music accounts for just 5 percent of the music its service plays. The settlement prevents the parties from suing until the end of 2016, after which Pandora will have to negotiate a licensing deal.
Among the music companies settling with Pandora are Vivendi SA’s Universal Music Group, Sony Corp.’s Sony Music Entertainment, Access Industries’ Warner Music Group and ABKCO Music & Records. The settlement, which was negotiated over the past two weeks amounts to about 10% of Pandora’s annual revenue.
Pandora today noted that its quarterly loss increased in Q3 of 2015, but active listeners increased and revenue rose 30% to $311.6 million. Active listeners rose to 78.1 million, up from 76.5 in the year ago quarter. Total listener hours rose 3 percent in Q3 2015. The growth comes despite the recent launch of Apple Music, which currently has 6.5 million paying customers and 15 million users total.