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Pandora Settles for $90M Over Playing Songs From Before 1972

by Keith Wagstaff /

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The record industry is feeling good vibrations after Pandora agreed to pay $90 million to settle a lawsuit over streaming songs from before 1972.

Because federal copyright law wasn't extended to master recordings until 1972, Pandora wasn't paying royalties on songs written before then. The major record labels decided to sue, claiming Pandora was profiting unfairly from some the "most valuable sound recordings of all time" from the Beach Boys, Bob Dylan, the Rolling Stones and more.

The lawsuit claimed that many of these songs were covered by state copyright laws. On Thursday, Pandora decided to put the matter to bed with a $90 million settlement.

"Together we share a common objective to grow the music industry and support artists," said Pandora CEO Brian McAndrews in a statement. "We pursued this settlement in order to move the conversation forward and continue to foster a better, collaborative relationship with the labels."

While the Recording Industry Association of America (RIAA) might be pleased, Pandora investors were not, as the company's shares dropped 20.5 percent in after-market trading.

The company not only has to deal with royalties, it also has to fend off new competitors like Apple Music, which grew from zero to 6.5 million paying subscribers since launching in June.

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