A big day in Washington yesterday, for the hearing into the proposed Internet Radio Fairness Act, and a chance for Pandora and music rightsholders to make their opposing cases for how internet radio royalties should evolve.
Pandora set out its stand, noting that it will pay almost $250m this year – more than half its annual revenues – to SoundExchange, while satellite radio stations only pay 7.5% of their revenues.
“The current rate-setting structure is a clear case of discrimination against the Internet and innovative services,” said CEO Joe Kennedy. “This lack of a level playing field is fundamentally unfair and indefensible.”
He was backed by eMusic boss-turned-VC David Pakman, who testified that “regretfully, I cannot point to a single stand-alone business that operates profitably in Internet radio”.
Yet Pandora is getting major pushback from SoundExchange, songwriters and musicians’ bodies, with The Recording Academy’s Jimmy Jam suggesting “It’s hardly fair to ask the very people who enable Pandora’s business to work to accept below-market payments,” while SoundExchange president Michael Huppe criticised Pandora’s claims as being “wrong, overblown, and based on an incomplete and premature record”.
And so it goes. The debate is becoming increasingly personalised in various ways. You had songwriters protesting outside the hearings and revealing their Pandora payouts (6m plays of ‘Livin’ On A Prayer’ in Q1 this year generated $110.42 for co-writer Desmond Child, 12.7m plays of ‘Beautiful’ made its writer Linda Perry $349.16, etc).
And you also had Joe Kennedy being accosted outside the hearing with questions about his salary, despite this being publicly available in the company’s SEC filings.
And the moderate, conciliatory viewpoint that will be required to come to any kind of workable long-term formula? That was offered by a politician, Congressman Howard Berman:
At the end of the day, this isn’t about content versus technology. Musicians and artists need to get adequately compensated to continue to create and share their art. And services need to thrive to ensure that the music continues to be heard. There’s more of a symbiotic relationship here. We just have to find the sweet spot that maximizes the ability of musicians and composers and songwriters to make the music … and the technologies to thrive and to play that music for the benefit of … the world.”
Well, here’s hoping.