Musicians hoping Pandora will join royalty-fee cause

Musicians battling for higher royalty payments from radio stations are lobbying former rival Pandora to join their cause.

Pandora, the Internet radio company, earlier this year abandoned its effort to convince Congress to lower its royalty fees.

The lobbying push had made it an enemy of advocacy groups pressing for royalty payments for musicians.

Now the musician groups hope Pandora will help it press Congress to eliminate an exemption from royalty fees for AM/FM radio stations.

The two sides have compelling joint interests. Musicians want the royalty fees, and Pandora wants a more level playing ground with AM/FM stations. 

“We hope now that we can look forward as partners and work together to assure all creators are paid fair market value for the use of their works across all platforms,” Mitch Glazier, senior executive vice president of the Recording Industry Association of America said in a statement.

“We welcome them and have long said that it’s not fair that Pandora pays more,” said Ted Kalo, executive director of the musicFirst Coalition, “but we want that equalized in the right way.”

Radio stations argue they shouldn’t have to pay to play songs because the airplay is free advertising for musicians.

Pandora hasn’t said that it would pivot to pressing for the elimination of the AM/FM exemption, but has supported it in the past. And in a statement last month announcing his company’s decision to abandon its bill pushing for lower royalty fees, co-founder Tim Westergren emphasized the need for a fair system.

He said Pandora “remains fully committed to benefiting and growing the entire music industry through a responsible/sustainable royalty structure and ensuring that artists can distribute their music and continue to be fairly compensated for their work and creativity.”

Rep. Mel Watt (D-N.C.), ranking member on the House Judiciary Subcommittee on Intellectual Property, introduced a bill earlier this year that would end the exemption.

Watt has been nominated to lead the Federal Housing Finance Agency, but Rep. Judy Chu (D-Calif.) is a co-sponsor of the bill, and a House Judiciary aide said Watt will recruit other members if confirmed.

“I think he will be happy to pass the baton to anyone willing to take on the fight,” the aide said.

Kalo said he expects interest in the topic to be high. “I suspect you’re going to have many members with an interest,” he said.

Along with an interest in Congress, Kalo is optimistic that AM/FM radio stations looking to provide online services would benefit from a reconfigured royalty fee system.

“There’s a window here where there could be a win-win,” he said.

Radio stations will continue to fight for the exemption, according to a spokesman for the National Association of Broadcasters.

"NAB will continue to make the case that local radio remains the number one vehicle for generating record sales and exposing new recording artists,” the spokesman said.

The spokesman pointed to the Local Radio Freedom Act, which would prohibit "any new performance fee, tax, royalty, or other charge" on AM/FM radio stations. The bill currently has 181 co-sponsors in the House and 12 in the Senate.

Instead of a bill requiring radio stations to pay royalty fees, the NAB has favored private deals between music labels and companies that own radio stations, such as the one reached earlier this year between Warner Music Group and Clear Channel Communications.

“We look forward to more marketplace agreements between radio companies and labels,” the NAB spokesman said.