Pandora Touts Web IV Proposal As a 'Win Win' For Everyone
November 18, 2014 at 3:50 PM (PT)
PANDORA went to the Net to hold a conference call to defend its stance in the current Web IV proceeding before the COPYRIGHT ROYALTY BOARD. PANDORA CFO MIKE HERRING and VP/Business Affairs and Associate General Counsel CHRIS HARRISON pretty much stuck to their guns, citing reasons why PANDORA's proposal is a "win-win-win" for itself, labels and artists, as is its recent deal with indie label group MERLIN.
While PANDORA's proposed rates are "in line" for what they have been paying since 2011, HERRING note that SOUNDEXCHANGE's proposal was "significantly higher" that, if enacted, would force the satcaster to reduce the hours of exposure to rightholders' music by 75%, which means labels and artists would receive $741 million less than the current pureplay rate.
The two also cited a "gold standard" study that found airplay on PANDORA increases sales of new product by 2.3% and catalog product by 2.6%. They also brought up data that 80% of the music played on PANDORA isn't played on radio "anywhere."
HERRING also noted that SPOTIFY isn't a competitor to PANDORA, but a complementary business."We have no direct evidence, but from a general observation of the evidence that the growth in Internet radio alongside subscription services overlap. Looking at the SPOTIFY and PANDORA customer bases, we've found that 60-65% use both services. They use PANDORA to discover music, then may go elsewhere to play them on SPOTIFY."
With all parties submitting their proposals, the CRB has entered into the discovery process where the part is can examine the others' proposals, comment on them and submit responses. One definite change from past royalty negotiations is that this time, PANORA has the NAB and SIRIUSXM on its side. "It's great that we've got so many participants on the user side, particularly compare to the number of participants who were interested in outcome of the last litigated web proceeding in Web II. Hopefully, we're optimistic that having the NAB, iHEARTRADIO and SIRIUSXM participate vigorously with us the present the best evidence to the judges so they'll come up with the right rate."
And should the judges choose the higher rate proposed by SOUNDEXCHANGE? They replied that PANDORA would have to do more direct deals with record companies.