New Bill Could Lower Royalty Rates For Internet Radio

From Ben Sasario, NYTimes: 

Willing buyer, willing seller. Those four words would seem innocuous, but in the world of Internet radio nothing is more contentious. 

They are part of a federal judicial standard that is the basis of how royalty rates are set for Internet radio services like Pandora Media. For years, however, online services have complained that the standard is unfair, and results in burdensome rates that are much higher than those paid by satellite radio. 

The battle flared up again on Friday with a new Congressional bill, the Internet Radio Fairness Act. Introduced in the House by Jason Chaffetz, Republican of Utah, and Jared Polis, Democrat of Colorado, the bill would move so-called noninteractive online radio services like Pandora and Clear Channel Communications’ iHeartRadio app from the “willing buyer, willing seller” standard to the one used to determine rates for Sirius XM Radio. 

Pandora pays a fraction of a cent each time a user listens to a song, and the total must be a minimum of 25 percent of its annual revenue; last year it paid about half its revenue to labels and performers. Sirius’s current rate is 8 percent. (Both kinds of services also pay separate royalties to songwriters and publishers.) 

Tim Westergren, Pandora’s founder, took to his company’s blog to say that the bill is long overdue. “The anti-Internet bias in federal law is nothing short of absurd,” he wrote.

Read More Here.

ALSO MUST READ: Internet Radio Fairness Act, Opinion by Jennifer Lane, Click Here.