By Jennifer Martinez - 06/26/13 03:45 PM EDT
"We never, nor would we ever, support such a thing. In fact, Pandora has suggested solutions that would guarantee no reduction in artist payouts while also nurturing the growth of Internet radio — a medium that is crucial to thousands of independent musicians who don’t enjoy major label support or FM radio exposure," the spokesperson continued.
Last year Pandora lobbied hard for the Internet Radio Fairness Act by Rep. Jason ChaffetzJason ChaffetzSunday shows preview: Parsing the war of words The Hill's 12:30 Report Watchdogs warn of 'serious' conflicts of interest for Clinton Foundation MORE (R-Utah) and Sen. Ron WydenRon WydenWhy you should care about National Whistleblower AppreciatIon Day Dems push to require presidential nominees to release tax returns Legislators privacy fight coincides with FCC complaint MORE (D-Ore.), which the company hopes will lower the royalty rates it pays to artists and recording labels for streaming their music online.
Pandora pays significantly higher royalty fees than cable and satellite radio stations do because it is placed on a different royalty-setting standard than the other digital radio services. The bill would modify the existing royalty rules so Internet radio services would be held to the same royalty-setting standard as cable and satellite radio stations, like SiriusXM.
The RIAA and others in the music industry opposed the bill, slamming it as an attempt by Pandora to underpay artists and recording labels for streaming their work online. This fall, a group of 125 singers and musicians — including Pink Floyd, Britney Spears and Rihanna—published an open letter opposing the bill and complained that Pandora was calling on Congress to "gut the royalties that thousands of musicians" rely on to support themselves.
In an op-ed published earlier this week in USA Today, Pink Floyd accused Pandora of attempting "to trick artists into supporting this unfair cut in pay." The band says Pandora co-founder Tim Westergren has sent personal emails to artists that ask them to sign a letter of support for Internet radio, but notes he left out the part about the company fighting for legislation that would lead to "an 85 [percent] artist pay cut."
"The petition doesn't mention that Pandora is pushing the growth of its business directly at the expense of artists' paychecks," the band members write. "Fine print is one thing. But a musician could read this 'letter of support' a dozen times and hold it up to a funhouse mirror for good measure without realizing she was signing a call to cut her own royalties to pad Pandora's bottom line."
The rock band also added that Pandora is now a public company and has doubled its listeners over the last two years.
"Netflix pays more for movies than Pandora pays for music, but they aren't running to Congress for a bailout," Pink Floyd writes. "Everyone deserves the right to be paid a fair market rate for their work, regardless of what their work entails."
But the Pandora spokesperson argues that the company and other Internet radio services are already on an uneven playing field when it comes to music royalty payments, noting that it's "by far the highest paying form of radio in the world and proudly pays both songwriters and performers." Radio broadcasters, for example, do not pay artists and recording labels for playing the sound recording of their songs over-the-air on traditional radio stations, whereas songwriters and publishers do get royalties.
"For perspective, to reach the exact same audience, Pandora currently pays over 4.5 times more in total royalties than broadcast radio for the same song," the spokesperson said. "In fact, at only 7 [percent] of U.S. radio listening, Pandora pays more in performance royalties than any other form of radio."
In a blog post responding to Pandora's statement, musicFirst says the 85 percent figure that the company cites came from Pandora itself—not the music industry.
"The company said the idea behind IRFA is to remedy the difference between Internet radio royalties (50% of revenue) and satellite radio (8% of revenue). Going from 50% to 8% is about an 85% cut. It’s simple math," the music industry coalition said. "Of course, these are the same people who said a pay cut would be good for artists, so maybe math isn’t their strong suit."
— This post was updated at 5:50 p.m.