(Adds Pandora comment)
By Joseph Ax
NEW YORK, April 17 Several major U.S. music
companies sued Pandora Media Inc on Thursday, accusing the
online streaming service of cheating them out of royalties by
playing thousands of pre-1972 recordings without paying
The music in question, from musicians such as the Beatles,
Louis Armstrong, Marvin Gaye and Fleetwood Mac, is "some of the
most iconic music in the world," the lawsuit said.
The lawsuit, filed in New York state court in Manhattan,
seeks unspecified damages and an immediate halt to Pandora's
"massive and continuing unauthorized commercial exploitation" of
The plaintiffs include Vivendi SA's Capitol Records
Inc and UMG Recordings Inc, Sony Corp's Sony Music
Entertainment, Warner Music Group Corp and ABKCO Music & Records
"Pandora is confident in its legal position and looks
forward to a quick resolution of this matter," a Pandora
spokesman said in an email.
Federal copyright law does not apply to pre-1972 recordings,
but the plaintiffs say New York state law provides copyright
protection for such recordings.
"Pandora's refusal to pay plaintiffs for its use of those
recordings is fundamentally unfair," the lawsuit said.
The lawsuit is not the first to seek fees from digital music
companies for pre-1972 recordings.
Last year, for instance, a U.S. nonprofit that collects
digital royalties for musicians, SoundExchange, filed a federal
lawsuit in Washington, D.C., against satellite radio company
Sirius XM Holdings Inc that includes claims of
underpayment regarding pre-1972 recordings. The lawsuit remains
Royalties represent a major expense for Pandora, currently
amounting to approximately half of its annual revenue, and
keeping them from increasing is crucial to the company's
"If we are required to obtain licenses for pre-1972 sound
recordings to avoid liability and are unable to secure such
licenses, then we may have to remove pre-1972 sound recordings
from our service, which could harm our ability to attract and
retain users," the company said in a regulatory filing in
In an unrelated case in March, a federal judge in New York
declined to alter the rate that Pandora pays to songwriters to
license their music, following a nonjury trial that pitted the
American Society of Composers, Authors and Publishers against
The case is Capitol Records et al v Pandora Media Inc, New
York State Supreme Court, New York County, No. 651195/2014.
(Reporting by Joseph Ax; Editing by David Gregorio and Lisa