Pandora has been hit with another lawsuit by a comedian accusing the streamer of shortchanging artists by neglecting to obtain the proper copyrights to stream their works — this time by Lewis Black. According to a complaint filed Thursday in California federal court, Pandora “took and exploited his works solely to make themselves money while knowing it had no license and had not paid, and would not be paying, royalties.”
The lawsuit is the latest in an escalating feud between streamers and comedians pushing to change the landscape of compensation amid a boom in popularity for spoken-word content. They raise novel licensing theories arguing that they should be paid for writing their jokes, much in the same way that musicians are paid royalties for composing song lyrics.
The lawsuit filed by Black accuses Pandora of knowingly flouting its obligation to secure the proper copyrights. “Pandora did what most goliaths do: it decided it would infringe now to ensure it had this very valuable intellectual property on its platform to remain competitive, and deal with the consequences later,” writes Richard Busch, a partner at King & Ballow representing Black, in the complaint. “Later is now.”
Pandora conceded in financial filings to the Security and Exchange Commission from 2011 to 2017 that it was at risk of losing its comedy content because it doesn’t have the proper licenses to stream the works, according to the suit. Pandora admitted that it “could be subject to significant liability for copyright infringement and may no longer be able to operate under [their] existing licensing regime.” The concession was removed after Pandora was acquired in 2019 by SiriusXM.
“Mr. Black once famously quipped in the wake of the Enron Scandal: ‘You don’t want another Enron? Here’s your law: If a company can’t explain in one sentence what it does, it’s illegal.’ The exact same thing is true here: If a Company can’t explain in one sentence how it has a license to use copyrighted works, it’s copyright infringement,” the complaint reads.
Black seeks more than $10 million over Pandora allegedly illegally streaming 68 of his works.
Pandora has maintained that the current compensation regime is legal under copyright law. In a countersuit alleging violations of antitrust law, it claimed that “Word Collections has consolidated its comedians’ naturally competing rights into a monopolistic portfolio and fixed the price of the only license available for those rights, ensuring that services have no alternative to its blanket license for its entire portfolio.”
Pieces of music are covered by two copyrights — one for the sound recording and another for the underlying written music. Streaming services like Pandora and Spotify pay royalties to the owners of each copyright.
But for spoken-word recordings, under which comics’ performances are classified, streaming services only pay for the recording and not the composition itself — in this case, comedy writing. Word Collection, which is looking to position itself as a collection group for comics akin to what ASCAP is for composers, seeks to change that. Its clients include the estates of Robin Williams and George Carlin, which sued Pandora in February.
Among the reasons that spoken-word artists are not compensated like musicians is that performing rights organizations like BMI, ASCAP and SESAC have existed since the 1930s to represent songwriters, while performing rights organizations for spoken word artists, like Spoken Giants and Word Collection, have only existed since 2019.
“They shoot first and aim second — that’s the way tech companies work,” said Jeff Price, chief executive of Word Collections. “They get caught, and they pay the parking ticket. They use their money to make it difficult and expensive for comedians to get paid.”
Price continued, “Comedians are looking for the companies using their stuff to follow the law — license the copyrights and make the payments. Nobody is asking for them to reinvent the wheel.”
Pandora and SiriusXM did not immediately respond to requests for comment.
