Earlier this year, the Record Industry Association of America began to pursue Pandora on behalf of record labels to seek royalties for the use of tracks recorded before 1972. Now, it’s reached a settlement that will see Pandora stump up $90 million for using the songs.
Federal copyright law covering music actually only applies to songs made after 1972—a loophole that’s used by some streaming service, for obvious reasons. But record labels know all too well that some states do honor copyright of older recordings, and that means that Sony Music Entertainment, Capitol Records, Warner Music Group, UMG Recordings, and ABKCO Music & Records have had their eyes on Pandora for a while.
On behalf of the record labels, the Record Industry Association of America has sued and sought royalties, but Pandora has settled outside of court. The terms of deal are being kept under wraps, but the settlement will be worth $90 million. One small known detail is that the settlement covers usage until the end of 2016; from 2017 onwards, Pandora will need a new deal to continue playing pre-1972 tracks.