Will Pandora’s Royalty Rate Proposal Cause Problems for Commercial Radio Again?

Kevin Ross | Posted Wednesday, November 21st, 2012 - Category: URBAN


tim westergreen

Will Pandora’s Royalty Rate Proposal Cause Problems for Commercial Radio Again?

As far as the title… while many artists would hope so, probably not, I don’t think we will hear much more about commercial radio paying artists anymore but Pandora has certainly opened the doors for artists to get exposure commercial radio’s PPM standard won’t allow. To that end Pandora wants to pay royalty rates compatible to other digital services and claims the company, while successful is not profitable. Aritsts argue Pandora’s not creating the product artists are. So does it makes sense for the online radio giant to ask congress to slash royalty rates by a whopping 85% with the Internet Radio Fairness Act (H.R. 6480 and S. 3609)? Without question asking for an 85% cut is excessive and artists are not happy with the proposal. Remember the debate about commercial radio paying royalties to artists? Cathy Hughes was adamant about not letting that happen to her company Radio One. She stated paying the proposed royalties to artists could literally bankrupt commercial radio stations. The issue was heated for a minute but suddenly disapeared. So does Pandora’s founder Tim Westergreen have a point in lobbying congress for the same reason? Major artists were not going to be on the forefront of the issue with commercial radio for fear of the corporate giants blackballing their music. Commercial radio is old enough to fight a good fight with extremely tight playlists and still holding the title as the king of music promotion but internet radio stations, while still relatively new, are growing but they don’t have the luxury to fight with artists. It’s OK for artists to be on the forefront of this issue because they are already getting paid from Pandora so the company may have to come up with other more creative ways besides playing artists to make a profit. Your thoughts?