Pandora attacks regular radio for paying less

Newest ally of recording industry aims to erase double standards in radio

Technology trends and news by Ronny Kerr
July 14, 2009
Short URL: http://vator.tv/n/95d

pandoraWhy should old-school radio only have to pay songwriters, while I get footed a tremendous bill for songwriters, performers, and record labels?

So complains Pandora, the newest friend of the record industry in the fight to start making radio stations pay for the songs they play. Reported first by Ars Technica, Pandora founder Tim Westergren sent followers of the online radio service an email expressing unhappiness with the current discrimination.

Westergren wasn’t just looking for pity points either. He encouraged those he emailed to take action by contacting House Majority Leader Nancy Pelosi about the “fundamentally unfair” fact that Internet radio pays higher royalties than traditional radio.

Interestingly, this latest news comes a week after Pandora made headlines for two separate though equally significant announcements.

Firstly, on July 7, webcasters and record labels reached a landmark agreement in the increasingly tense conflict over how the latter would receive the earnings it felt entitled to, while leaving the former enough to not only survive but to thrive. Under the Webcaster Settlement Act of 2009, online stations will be charged percentages of their actual revenues, instead of just flat rates for every song played. Small broadcasters and big broadcasters, like Pandora, appear to be equally pleased about the results.

Then a few days later, on July 10, it was revealed that Pandora was closing a new financing round, estimated by peHUB at around $35 million.

Though traditional radio’s excuse for having minimal radio fees has often been that it is an excellent source of spreading the word on new music too many people, this cannot be accepted too easily these days, as the Internet increasingly becomes the number one spot for finding new music.

With Pandora drawing so much money from investors, we would be silly to wonder who’s going to be one of the biggest contenders in music promotion for the next few years. Therefore, Pandora probably has a point. Maybe they should be playing even less than commercial radio.

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