Pandora Radio: Could Majors Get Better Royalty Rates Than Indies?

Webcasting rates are up for discussion in the US and Pandora is pushing for a tiered payment system. At issue are current rates that are affecting Pandora's ability to turn a profit, and the music industry that wants more income as revenue from sales diminish. The following is an article reported on by Music Business Worldwide this morning.

Independent labels are deeply concerned that US web ‘radio’ services such as Pandora and iHeartRadio may soon be permitted to pay less for their music than for tracks from the majors.

If that sounds like an arbitrarily unfair system, well, that’s exactly what it is.

It could literally mean that a stream of a Taylor Swift track – signed to independent label Big Machine – generates less money than a play of a track from the likes of Psy (Universal), New Kids On The Block (Sony) or Paris Hilton (Warner).

This widespread worry amongst indies has been set into motion by the Copyright Royalty Board (CRB) in the US, which has just asked the market’s Copyright Office if it can be permitted to set variable statutory royalty rates for recorded music.

Aka: One rate for some, another rate for others.

...What’s more, accusations are also flying that Sony and Universal are helping drive this potential outcome with a behind-the-scenes lobbying campaign.

It should be noted that no such move is happening in Canada, but the Copyright Board of Canada has left record companies and music publishers aghast with a tariff that falls well below the international norm and there is no requirement that the Board respond to an appeal of the rate in a timely fashion.

Continue reading about the US Copyright Royalty Board here.

 

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