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Pandora Sues Songwriters: Response from Music Creators North America, European Composers and Songwriters Alliance

The International community of music creators today condemned the on-line service Pandora for filing a lawsuit early this week asking a federal court in New York to reduce the already miniscule performance royalties it pays to songwriters—currently just four percent of Pandora's total revenue. Pandora is also fighting in the US Congress for legislation to lower its royalty obligations to recording artists.

“This is greed in its purest form,” stated Rick Carnes, president of the Songwriters Guild of America and co-chair of the Music Creators North America alliance. “Songwriters want to support the growth of online music services to the benefit of everyone, including consumers, but the type of behavior being exhibited by the multi-millionaires who own Pandora is simply making that impossible. For the founders of a billion dollar business that is built completely on the backs of music creators to suggest that paying those creators four percent of their revenue is still too much should be an embarrassment.”

Songwriters Association of Canada president and Music Creators North America co-chair Eddie Schwartz added, “Much like the Fair Trade Coffee movement, consumers need to know who fairly includes music creators in the enormous value chain that is based on our collective work. It is a real shame that Pandora seems determined to be on the wrong side of that simple, ethical equation.”

Alfons Karabuda, Chair of the European Composer and Songwriter Alliance, echoed those sentiments. “Our European-North American alliance stresses fair compensation for music creators as a core prerequisite for a healthy entertainment sector. These moves by Pandora will be energetically opposed on that basis.”

The three leaders of the European-North American music creator groups also pointed out that Pandora claims that the direct licensing of performance rights in the United States by music publishers is in part a catalyst for its actions. “That is an issue we take very seriously,” said Carnes. “And one about which we will have much to say in the future.”

Pandora reported revenue of $338 million last year, with a market cap of over $1.5 billion. According to music publishing industry analysts, “Pandora currently pays songwriters and music publishers a smaller percentage of music royalties than any other digital music service.”

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Music Creators North America (Music Creators NA) and the European Composers and Songwriters Alliance (ECSA) have recently formed an alliance to protect and advance the rights of music creators throughout the United States, Canada and Europe. Together, Music Creators NA and ECSA represent national music creator organizations and their members from over thirty nations, all of which organizations operate independently and solely on behalf of music creators and their heirs.

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