PUBLIC VERSION Before the UNITED STATES COPYRIGHT ROYALTY JUDGES THE LIBRARY OF CONGRESS Washington, D.C. In re ) ) DETERMINATION OF ROYALTY ) RATES AND TERMS FOR ) Docket No. 14-CRB-0001-WR (2016-2020) EPHEMERAL RECORDING AND ) DIGITAL PERFORMANCE OF ) SOUND RECORDINGS (WEB IV) ) PANDORA MEDIA, INC.’S PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW R. Bruce Rich (N.Y. Bar No. 1304534) Benjamin E. Marks (N.Y. Bar No. 2912921) Todd Larson (N.Y. Bar No. 4358438) David Yolkut (N.Y. Bar No. 4444543) Reed Collins (N.Y. Bar No. 4628152) Elisabeth M. Sperle (N.Y. Bar No. 5035571) WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Tel: 212.310.8000 Fax: 212.310.8007
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[email protected] Counsel for Pandora Media, Inc. June 19, 2015 PUBLIC VERSION TABLE OF CONTENTS INTRODUCTION ...........................................................................................................................1 I. THE GENESIS OF PANDORA, ITS PRODUCT OFFERING, AND THE NATURE OF THE MARKETPLACE IN WHICH IT OPERATES ......................7 A. Pandora’s Early History and the Development of the Music Genome Project ............................................................................................7 B. Pandora’s Playlist Technology ..................................................................10 C. The Pandora Listener Experience ..............................................................12 D. Pandora’s Position in the Digital Music Ecosystem ..................................14 II. THE WILLING BUYER/WILLING SELLER RATE-SETTING STANDARD, THE REQUIREMENT OF EFFECTIVE COMPETITION, AND THE IMPLICATIONS FOR THE PARTIES’ RESPECTIVE BENCHMARKS IN THIS PROCEEDING ..........................................................17 A.