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Pandora and record labels reach $90 million settlement over pre-1972 songs

Pandora has reached a $90 million settlement with record labels over the music service's use of recordings created prior to 1972. Specific terms of the settlement are confidential, but it offers "a nationwide resolution for Pandora's use of the plaintiffs' pre-1972 recordings." Those plantiffs are a mix of major and independent record labels including Sony Music Entertainment, Capitol Records, Warner Music Group, UMG Recordings, and ABKCO Music & Records. The Record Industry Association of America (RIAA) sued Pandora last year on behalf of the labels, seeking royalties for Pandora's use of many classic tracks.

Federal copyright law covers songs made after 1972, but states including California recognize the copyrights of older recordings, the RIAA argued. This isn't the first time that labels have sued over this issue; the RIAA ran the exact same play against Sirius XM in 2013. A $210 million settlement for that conflict was announced in June. "We pursued this settlement in order to move the conversation forward and continue to foster a better, collaborative relationship with the labels," said Pandora's Brian McAndrews. The settlement extends through the end of 2016, after which Pandora and the labels will need to reach another deal to keep pre-1972 songs playing.

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Separately, The New York Times reports that Pandora is abandoning its attempt to decrease the amount it pays in royalties to songwriters. The company once seemed to think buying an FM terrestrial station in South Dakota would give it leeway to negotiate smaller royalty handouts, but has now gone back on that plan.