Digital

As Pandora debate rumbles on – why doesn’t the digital service back US record industry’s fight for AM/FM royalties?

By | Published on Tuesday 2 July 2013

Pandora

Pandora’s various efforts to reduce its royalty bills remain big news in the US, with Pink Floyd’s recent op-ed on the debate in USA Today resulting in a plethora of other opinion pieces on the rights and wrongs of the streaming music service trying to cut the payments it makes to record labels and music publishers, and recording artists and songwriters.

And while in recent weeks Pandora’s disputes with the publishing sector’s US collecting societies ASCAP and BMI have had most attention, the focus is now back on the monies the streaming company pays the record labels, because that’s what the Floyd wrote about.

As much previously reported, sound recording copyright owners in the US don’t receive any royalties when their tracks are played on AM and FM radio (unlike in Europe), but do when recordings are used by satellite or online radio services. These royalties are – in the main – paid via the statutory collective licensing system, managed by SoundExchange, with rates ultimately set by statute.

The rules regards royalties differ between satellite radio (ie Sirius XM) and online services, and Pandora says that that is unfair, because the former end up paying lower royalties. To that end the digital firm has been lobbying in Washington to try to get the system changed, to bring its royalty payments inline with those paid by Sirius XM. Which will mean lower rates, and less money going to the labels and recording artists.

Various industry and artist groups have spoken out against these moves, including artist and producer Blake Morgan, who recently had a public email exchange with Pandora founder Tim Westergren. And Morgan is amongst the people to have contributed a new polemic to the debate since the Floyd’s piece captured the headlines.

In his new piece, published on the Huffington Post website, he acknowledges Westergren’s constant argument – that none of this is about lowering the payments Pandora makes to rights owners and artists, but rather it’s about combating inequalities that exist in the current system, in which his competitors in satellite radio pay lower sound recording royalties, and his rivals in the AM and FM sector pay no royalties to the record industry at all.

But, says Morgan, if that’s the real aim of Pandora here, why doesn’t Westergren invest his energies into backing the record industry’s so far unsuccessful efforts to bring US copyright law inline with copyright systems elsewhere, whereby labels and recording artists are paid whenever their recordings are played or broadcast in public.

Says Morgan: “Mr Westergren has often stated that internet radio and Pandora in particular is being ‘discriminated against’ because they have to pay the performer [sound recording] royalty and terrestrial radio, who he identifies as a competitor, does not. He has also recently stated that ‘Pandora is a company founded by artists to help artists. It is at the core of who we are and how we make decisions about our business and that will never change’. Then help us. With the right kind of help”.

He continues: “Instead of lobbying Congress (as you have) to lower Pandora’s rates, honour the rates Pandora, artists, and labels agreed upon together for internet radio hand-in-hand with Congress in 2009 … and stand with music lovers and music makers in reasonably and rationally arguing that terrestrial radio has never paid its fair share, and it’s time it did”.

It’s an interesting spin in a debate that seems likely to rumble on for sometime yet. Read Morgan’s full piece here.



READ MORE ABOUT: | | | | |