NMPA: Pandora's CEO departure may mend fences with songwriters

The head of the National Music Publishers Association (NMPA) on Monday said the forthcoming departure of Pandora CEO Joe Kennedy presents an opportunity for the online radio service to patch up its fractured relationship with the songwriting community.

NMPA CEO David Israelite said songwriters are frustrated that roughly four percent of Pandora's revenue goes towards compensating them for their music, while nearly half of company's revenue goes towards paying recording labels and recording artists. Meanwhile, Israelite notes that Pandora has filed suit to lower the percentage of revenue it pays to songwriters.

"The four percent Pandora pays is unfair and must change. In other areas of the music business, songwriters and music publishers often earn the same amount that is paid to record labels and artists," Israelite said in a statement. "I wish Mr. Kennedy the best, but a new CEO could go a long way toward creating a true business partnership with the music industry by addressing this issue and respecting the contribution of songwriters.” 

A spokeswoman for Pandora could not be reached for comment.

This fall Pandora sued the American Society of Composers, Authors and Publishers to lower the license fees they pay to songwriters and composers for playing their songs, Bloomberg reported.

During the company's earnings call last week, Pandora CEO Joe Kennedy said he planned to step down from his role as soon as a replacement is found, according to Billboard.

In Washington, Pandora has lobbied for Congress to modify the music royalty rules that are used to set the fees it pays to record labels and music artists for streaming their music online. The Oakland, Calif.-based company threw its support behind the Internet Radio Freedom Act spearheaded by Rep. Jason Chaffetz (R-Utah) and Sen. Ron Wyden (D-Ore.), which aims to modify the royalty-setting rules for online radio services. Pandora believes the bill will lower the royalty fees it pays so they're in line with the fees paid by satellite and cable radio stations.

The bill is expected to be re-introduced this session.

The NMPA, which represents music publishers and songwriters in Washington, spoke out against the bill this fall.