Musicians First Coalition Fights Pandora's Attempt To Lower Royalty Payments

Battling Pandora

YESTERDAY (NET NEWS 8/29), PANDORA shared good news, as the company saw its Q2 2012 revenues increase 51% of the same quarter last year, to $101 million, and beat second-quarter earnings expectations, sending shares sharply higher after the results. Total mobile revenue grew 86% year-over-year to $59.2 million. The company ended Q2 with $82.3 million in cash, up from $80.6 million at the end of the first quarter.

TODAY (8/30), the news isn't as positive, as THE MUSICIANS FIRST COALITION is complaining PANDORA is trying to lower the royalty payments to musicians in a bid to boost its profitability.

THE NEW YORK POST reports, "The coalition is expected to begin a PR campaign against PANDORA that will include alerting its musician members -- who include MILEY CYRUS, RIHANNA and WYCLEF JEAN -- of the company's effort to trim its millions in royalties payment through a CAPITOL HILL push."

PANDORA currently claims it pays musicians a royalty of 2 cents per listener per hour. The company says that added up to roughly $136 million last year on $274 million of gross revenue.

The rates for webcasters is set in WASHINGTON, D.C., and isn't set to change until 2014. Rather than wait, PANDORA is pushing for lawmakers to change the law governing the rates. A bill, the "Internet Radio Fairness Act," has been sponsored by Rep. JASON CHAFFETZ (R-UT), and would allow webcasters to lower their rates.

Musicians argue PANDORA's rate, and that of all webcasters, should remain the same. They also are pushing for terrestrial radio to pay artists royalties. That position is being pushed by Rep. JERROLD NADLER (D-NY), who introduced "First Act" recently (NET NEWS 8/20).

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