Did Pandora’s decision to buy an FM radio station in order to secure loyalty rates go down well with collecting society ASCAP and publishing body the NMPA? What do you think? “Pandora is going to pursue lawsuits and gimmicks. Pandora is hoping to fraudulently sneak in the back door. Any shred of credibility that Pandora had is gone. They are at war with songwriters,” said NMPA boss David Israelite at the association’s annual general meeting. ASCAP president Paul Williams is just as angry. “Pandora is trying every trick in the book to brazenly and unconscionably underpay and take advantage of the creative labor that produces the core offering of their business – music written by individual songwriters and composers,” he told Billboard.
Pandora has stirred up a real hornet’s nest, but for what reward? In its official SEC filing about its acquisition of KXMZ-FM, Pandora outlined the likely financial impact of securing the royalty rates it’s entitled to by owning an FM station. “The Company believes that qualifying for these royalty rates could provide the Company with modest savings (less than 1% of revenue) in content acquisition cost compared with the rates it is currently paying.” Pandora said in March that it expects revenues of between $600m and $620m in its fiscal 2014. Whether savings of just over $6m are worth an escalating “war” with songwriters and publishers is open to question.