How Real Are Market Rates in Music License Business?

Pandora Music Inc., iHeartMedia Inc., and other digital music services pay songwriters too little—a government-set rate that falls below what the composers would get on the open market—a royalty organization will tell a federal appeals court Feb. 8.

The U.S. Court of Appeals for the District of Columbia Circuit will hear arguments on whether rates set by the Copyright Royalty Board are based on what the digital music services would pay to play the music in a free market.

SoundExchange Inc., an organization that collects royalties for copyright owners from digital music services, is prepared to argue that licensing deals ...