News

Pandora Makes Royalty Rate Plea

According to a recent story in the Washington Post, Pandora is considering going off the air if the music industry's high royalty fees for online radio stations aren't lowered soon. While Pandora boasts a million daily listeners and an iPhone app that's pulling in around 40,000 new customers a day, the company claims that it will lose 70-percent of its $25 million in revenue due to fees that are the highest in the business. (Traditional radio stations don't pay any fees and satellite stations pay much less at 6-to-7-percent of their revenue as compared to the 19/100 of a cent per song, per listener webcasters must fork over.)

"We're approaching a pull-the-plug kind of decision," the company's founder, Tim Westergren, said in the story. "This is like a last stand for webcasting."

A federal panel decided to raise the online rate from 8/100 of a cent per song per listener in 2006 to the proposed 2010 rate of 19/100 of a cent. Thousands of Internet-based stations went silent on June 26, 2007, to protest the rate hike, but their pleas have largely been ignored.

— ARTISTdirect Staff
08.18.08