Typically, workers band together to have greater leverage against corporations. In the case of music streaming service Pandora and the American Society of Composers, Authors, and Publishers, that strategy seems to have backfired, in a way that means the artists will be paid less for the music they produce.
First, a brief primer on ASCAP: It's basically a middleman that collects fees from the outlets that use its 470,000 members' music, and distributes the money back to artists in the form of royalties. Since that also makes it sort of a cartel, it's been operating since 1941 under a consent agreement with the Department of Justice that requires it to set fair rates and not discriminate between licensees.
Recently, though, some of the large labels that license their content through ASCAP tried to withdraw digital music rights from that agreement, and started negotiating higher rates with Pandora on the side. Pandora sued to make sure ASCAP still had to allow access to all the content it had originally, saying its separate agreements only take effect when the ASCAP contract ends, in 2015.
On Tuesday, the court came down in Pandora's favor, saying that the terms of the consent decree that governs ASCAP means it can't make exceptions to what it offers.
That's not the only way in which Pandora is trying to reduce the royalties it pays artists. It's been pulling in more advertising revenue lately, but has never been profitable, and argues it needs to bring those outlays more in line with what terrestrial and satellite broadcasters pay artists (which is to say, next to nothing). An effort to do that legislatively failed last year, though, Pandora has been reduced to protest moves like buying its own terrestrial radio station as a backdoor way of putting itself in the traditional category.
Oh, and putting together warm-and-fuzzy ads about how streaming makes the music world go round:
The overall debate over whether Pandora is good or bad for the musical ecosystem has gone too many rounds to count. This latest development just means artists, bound by a decades-old agreement, can't extract more from the company than they've already got.