Industry-formerly-known-as-Music Deathwatch:

Pandora's Internet radio bill hits a wall of opposition in Congress

Pandora CEO Joe Kennedy told Congress today, in no uncertain terms, that his business is in danger from high copyright royalty rates. But his plea fell on unsympathetic ears.

At a hearing before the House Judiciary Committee, key representatives were not only unmoved by Pandora, they were more interested in raising the royalties paid by terrestrial radio to musicians (radio currently doesn't pay royalties at all.)

Pandora, by contrast, pays about half its revenue in copyright royalties. Today, Kennedy compared those fees to satellite radio, which pays about 7.5 percent of its revenue, and cable radio, which pays 15 percent.

"The rates today in Internet radio prevent anyone from entering the market, or for those there, making any profit in the market," said Kennedy. [...]

Rep. Watt said that the "longstanding inequity" in rates that Pandora was complaining about ignored the fact that "an even longer-standing inequity exists, in that US copyright law fails to recognize a performance right for vocal artists and musicians when their music is played over FM and AM radio."

In other words:

Pandora: "Change our rates to be in the same order of magnitude of what 'real' radio gets away with!"
Congress: "Actually we're more interested in putting radio out of business too."

Which is no great loss, I guess, but the stupid it burns.

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6 Responses:

  1. protospork says:

    I always took for granted that radio was exempt from paying royalties because it's essentially free promotion. Ruining that would be colossally stupid.

    Not that stupidity's stopped anyone yet.

  2. I wish I were more surprised, but it seems any time someone lobbies Congress to do something good, they end up screwing it up even worse. When Pandora sent out their lobbying push for equality, I had a feeling this would be the result.

    Any time you get Congress involved, you're fucking a hornet's nest.

  3. Ian Young says:

    Croney Capitalists: Taxes are unconscionable! The Government needs to wield less power because it is in competition with the Zaibatsus for control over the nation. Only by decreasing taxes and increasing mandatory fees can this imbalance of power between democracy and monopoly be corrected!

  4. ilya says:

    Well, maybe then Pandora is just an unsustainable business model and should go out of business. What's it for? It doesn't make money for anyone: not for Pandora and not for the musicians.

    See this article:

  5. AMB says:

    I'm surprised that you sound surprised.

    After all, rent-seekers gonna rent-seek.