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Pandora reaches deal to keep pre-1972 music

Pandora reaches deal to keep pre-1972 music
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Pandora has reached a settlement with a group of record labels that will keep recordings from before 1972 in the streaming service's catalogue for more than a year.

Pandora and the recording industry are regularly at odds, and earlier this year, five labels including Sony Music Entertainment and Warner Music Group sued service for playing recordings from before 1972 without paying royalties on them.

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State, rather than federal, copyright protection covers recordings made before Feb. 15, 1972, which meant that the tracks in question were subject to a patchwork of state laws. Courts in New York, where record labels filed suit over the tracks last year, had ruled in favor of some ownership claims for recordings from before that date.

The $90 million confidential settlement guarantees the tracks will stay on the service through the end of 2016 and brings a nationwide resolution to the conflict over the recordings.

“Pandora is excited to have found resolution with these record labels,” said Brian McAndrews, Pandora’s CEO, in a statement. “Together we share a common objective to grow the music industry and support artists. We pursued this settlement in order to move the conversation forward and continue to foster a better, collaborative relationship with the labels.”

In a statement, Recording Industry Association of America chief Cary Sherman called the settlement “a significant milestone and a big win for the music community.”

Pandora has also agreed to stop trying to apply a cheaper royalty rate to music it has played since June 2013. It has not agreed, however, to stop its pursuit of a license afforded to digital services linked to terrestrial broadcasters that would allow it to pay lower royalty rates.

It is a brief detente for Pandora and the recording industry, who have battled for years over how artists should be compensated when Pandora users stream their music.

The settlement will give both sides a chance to negotiate longer-term deals to allow Pandora to play the pre-1972 tracks. Congress could also bring the music under the jurisdiction of federal copyright law.

The decision comes ahead of a ruling by the Copyright Royalty Board on how much Pandora and similar services should pay artists for each song they play later this year.

Questions about the royalty rates Pandora pays are being closely watched as the company charts its future. Though it has millions of users, it has frequently struggled to maintain profitability. It said earlier this year it had paid $1.5 billion in royalties over the course of its existence.