NPR Reports Pandora Has A 'Deal' To Favor Certain Artists

Pay For Favoring?

Is PANDORA accepting payment for playing certain songs? Not exactly, but NPR reports, "a deal between PANDORA and a group of record labels has raised concerns that the company is favoring certain songs over others because it's paying the musicians behind those songs a smaller royalty."

While technically not payola, the new deal PANDORA made with a company called MERLIN is raising eyebrows. MERLIN is "a consortium of independent record labels," that represents a number of smaller artists.

If they were a terrestrial radio station and they were getting a discount on certain music as long as they played it more than other music, that would be considered illegal...

NPR explains, "Performers get paid a small royalty each time one of their songs is played on Internet radio, at a rate set by a Royalty Court at THE LIBRARY OF CONGRESS. But Internet radio and labels can strike individual deals, as PANDORA did with MERLIN. The Internet service will recommend MERLIN artists over those not affiliated with the consortium in exchange for paying MERLIN's musicians a lower royalty rate. MERLIN artists get more spins, and PANDORA winds up paying less in royalties than it would if were giving those same spins to non-MERLIN artists. Plus, consortium labels will get to suggest favorite tracks."

The webcaster, which allows users to "like" and "dislike" individual tracks to help build a personalized experience is, "giving a discount in exchange for airplay," CRACKER and CAMPER VAN BEETHOVEN founder DAVID LOWERY told NPR. LOWERY, who also teaches in the music-business program at the UNIVERSITY OF GEORGIA added, "so essentially you're being advertised to without you knowing it."

So is this payola? GEORGETOWN UNIVERSITY adjunct professor and copyright lawyer JIM BURGER explained to NPR that this kind of deal would receive legal scrutiny if it were taking place on old-fashioned radio. "If they were a terrestrial radio station and they were getting a discount on certain music as long as they played it more than other music, that would be considered illegal," he said.

PANDORA CEO BRIAN MCANDREWS told NPR there's no comparison between payola and what his company is doing. "Payola is where record labels pay radio stations to get airplay, and the opposite is what happens today. As PANDORA, we pay the record labels and the artist to allow airplay. So it's completely different." He continued, "every song will go through the Music Genome Project, and our listeners still retain the ability to personalize their stations the way they always have."

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