6-6-2012
Pandora founder Tim Westergren made his case to level the out-of-whack royalty playing field at "The Future of Audio" hearing on Capital Hill Wednesday. Not only did Westergren tell lawmakers about the hefty fees Pandora has to shell out to play music, he took a shot at how radio doesn't pay anything, and he wants those rules changed.
READ ALL OF WESTERGREN'S TESTIMONY HERE
Westergren said, ?Last year, on revenues of $274MM, Pandora paid $137MM in performance fees to performing artists and labels, or 50 percent of revenue. That same year, Sirius/XM, on revenues of $2.74B, paid $205MM, or 7.5 percent of revenue; and broadcast radio, on revenues of roughly $15B, paid zero. It is time for Congress to level the playing field and to approach radio royalties in a technology neutral manner."
Westergren said, "the current rate-setting law is unfair to performing artists, unfair to record labels, and unfair to Pandora and internet radio as we compete every day with broadcast radio and satellite radio for listener loyalty and advertising and subscription revenue. America?s obligations to our performers should be shared proportionally by all who use their music. What amounts to a subsidy of entrenched radio media stifles innovation, discriminates against the internet and adversely affects consumers. It is time to unshackle innovation and allow new technologies and new forms of audio consumption to compete fairly.?
(6/7/2012 12:50:20 AM)
I agree that it should be consistant across the board. This is not Pandora's issue though. There is a rate that is paid per song play. The amount paid is not about percentages of revenue, so the 50% vs 7.5% argument is pointless. Pandora's revenue does not keep up with their cost. Pandora has always been a broken business model. Always will be.
(6/6/2012 10:17:52 PM)
Tim Westergren knew the rules when he entered the gsme. Cost of doing business, Tim. Why should the rules be changed just because your business model leaves no chance for profit?
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