11-14-2012
Pandora founder Tim Westergren has been taking a lot of heat for his recent efforts to lobby Congress to lower royalty rates. He's called his effort an attempt to get on a more level playing field with other broadcasters. Pandora recently joined forces with Clear Channel and others in support of the Internet Radio Fairness Act and a coalition was even formed to show more solidarity. Yesterday at the Future of Music Summit in Washington, Westergren said it's not true he's trying to change the rules because the Pandora business model isn't working.
Pandora and others are backing the Internet Radio Fairness Act which would reduce royalty rates and bring them in line with the fees charged to its digital competition, including satellite and cable radio. It's what everyone is calling a "level playing field." Westergren says, "We're asking for a standard parity."
Although Pandora has yet to turn a profit despite its explosive growth, Westergren said this is also about helping artists. "It's really important for artists to try to parse the rhetoric around this. I totally empathize with artists and groups, even the most vocal ones, that are upset about it, but I think we can get past that and talk about the facts of this." Westergren believes the lower fees, which also means less of a payout to artists, would be offset by more users.
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