Pandora — practically the poster child for online radio — says it will shut down if royalty rates enacted in March of 2007 are not altered soon.
Despite all of those warnings, the rates remain intact and must be observed by webcasters, even as the battle over them continues. Aside from a few concessions to small webcasters and those with lots of unique streams, Washington lawmakers have not altered the rates, which currently require Pandora to fork over 70 percent of its revenue to labels and artists. …
If Washington lawmakers want to ensure that legal music services cannot compete with under-the-radar alternatives that pay nothing to artists, they’re doing a bang-up job. …
While all forms of U.S. radio pay royalties to songwriters and publishers through rights organizations such as BMI and Ascap, record labels and recording artists have not received performance royalties from radio in this country, because radio was thought to have a promotional effect on sales. With sales flagging, labels and artists are trying to collect licensing fees from all uses of their music, including radio. Satellite radio stations must pay a small percentage of revenue, while terrestrial radio stations currently pay no royalty to labels and recording artists.
As I’ve asked here at KP over and over and over and over and over, why does this unreasonable and demonstrably poor policy persist? Is the U.S. Copyright Royalty Board that clueless? Or is it just that the broadcast radio interests are really good at playing them?
Pandora has already ceased streaming radio to the U.K. because of these royalties that they have to pay and terrestrial stations do not. Is it going to take the death of a large, popular site like Pandora for meaningful change to happen here?
The Save NetRadio Coalition has more information and ways to make sure that this issue stays in Congress’s face until they muster the gumption to deal with it.