Jam will testify before the House Judiciary Committee on Wednesday at a hearing that will examine music licensing and a bill backed by Pandora that proposes to modify the current royalty rules used to help determine the rates paid by Internet radio services for streaming songs. The bill, the Internet Radio Fairness Act (IRFA), would place Internet radio on the same royalty-setting standard as cable and satellite radio services, which Pandora believes will lower the royalty fees it pays.
But Jam argues that Pandora's push for the bill will ultimately lower its royalty payments to musicians "below the fair market value," hurting the average musician and recording artist. Jam cited a recent story in Billboard Magazine about a study from Boston's Berklee College of Music that found that the average income for musicians over the past five years is estimated at $34,000 a year.
"We're talking about pennies on a stream and trying to have that lowered just doesn't seem to make a whole lot of sense," said Jam, who also serves as the chair emeritus of the Recording Academy.
The music industry has lobbied fiercely against the IRFA in the run up to the Judiciary Committee's hearing.
Pandora argues that it has struggled financially in part because of the unfairly high royalty fees it pays and lowering the rates would help boost its financial health. Jam pushed back against that argument.
"When someone says to you, 'I'm going to pay you less money so [I] can make more money,' that raises a red flag, so I don't think that's the way business should be done," Jam said.
He contends that Pandora and other music industry players should work out an agreement on royalty payments for Internet radio and Congress should stay out of the matter.
"I think obviously in any business there are certainly ways to go about doing your business better that don't involve Congress," Jam said. "We want to be collaborative partners [with Pandora] because we believe what they do is wonderful because it exposes music to people."
"We will welcome collaboration rather than getting Congress involved," he said.