The Internet Radio Fairness Act was seen by Pandora as a bill that would put internet royalty rates on par with those paid by satellite and cable audio platforms, but it was seen by musicians as a massive pay cut. According to reports, Pandora has thrown in the towel.
Musician/label organization musicFIRST blogged, “We won!”
They didn’t have a problem with equal rates, but they did not want the equalization to be borne on their own backs – which they said is precisely what would happen as satellite/cable rates remained the same while internet rates fell to meet them.
They saw it as an 85% cut in their internet royalty income.
According to Billboard, instead of pursuing the legislation, Pandora is planning to take its case right to the Copyright Royalty Board. Pandora staffers told Billboard that the staff at CRB has undergone some turnover and that there is cause of optimism on that front.
musicFIRST still has AM and FM radio in its sights, so that battle is far from over.
RBR-TVBR observation: Broadcasters didn’t really have a dog in this fight. But every time it came up for debate, it provided a platform for somebody to drag broadcast radio into the argument.
Keeping broadcast out of the question and getting a clean comparison between internet and satellite/cable was precisely what Pandora wanted.
But the bill has been languishing throughout 2013, so it’s not surprising that Pandora is exploring other avenues to bring its royalty costs to a manageable level.
Musicians should be glad that their music is broadcast by any means. Perhaps the frequency range of the audio should be part of the equation. A “station” that has audio up to 20,000 Hertz would pay standard royalties and a station that only goes up to 10,200 Hertz would pay less. There would be stations that only go to 4,000 Hertz or 8,000 Hertz that would be able to survive with the unreasonable royalty charges with such an arrangement. I see royalties as a welfare system for bad musicians and a minor concern for the good musicians because they sell recordings.
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