Pandora’s 2013 acquisition of KMXZ-FM station approved by the FCC

This week the FCC approved Pandora's acquisition of KMXZ-FM, Hypebot reports.

Pandora has been pursuing the acquisition of the small South Dakota radio station since 2013, not because the company wants to become the next iHeartMedia but because the ownership of said FM station would pave the way for Pandora to apply for a Radio Licensing Marketing Committee license, which would enable a reduction of payments to performing rights organisations such as ASCAP and BMI by 0.15% (to 1.7%).

Pandora claims that at the moment sixteen out of its top twenty competitors in the internet radio space benefit from such license, which is conditional upon a company owning a traditional radio station. 

Rights organisations cried foul on the transaction and this led to the FCC delaying the acquisition. Ultimately though the commission’s determination was that the examination of the reasons behind Pandora’s acquisition of the station was beyond its scope, and that its key focus was to ensure that the acquisition didn’t run afoul of foreign ownership laws. 

Unless the RMLC license is altered soon, it looks like Pandora is likely to obtain the discount it was originally looking for on its PROs rates, but one might wonder as to whether the 0.15% reduction is worth antagonising songwriters who are already disappointed with the royalty checks coming in from the internet radio service.

(Andrea Leonelli)