Pandora Balks At Canadian Royalties

Making Offers They're Quite Willing To Refuse

PANDORA, the 800-pound gorilla of Net radio in AMERICA, won't be coming to CANADA any time soon -- or at least until it lowers its royalty rate. In an e-mail sent to in THE TORONTO GLOBE-MAIL, PANDORA founder TIM WESTERGREN wrote "These rates ... are astronomical ... As long as rights societies take this approach, they will prevent PANDORA from launching to Canadian users."

CANADA's performance royalty collection apparatus, RE:SOUND, has asked the government to sign off on a streaming charge for web-based music of either 45% of the site's gross revenues in CANADA or 7.5-tenths of a cent for every song streamed. That's on top of royalties music services must pay to SOCAN, a separate agency that represents songwriters and music publishing companies.

In comparison, Canadian terrestrial radio broadcasters pay a rate of 2.1% of revenue, which is less than 5% of what's being considered for Net broadcasters. In the U.S., commercial webcasters pay just under one-fifth of a cent per song streamed and a minimum of $25,000 per year -- or a total that cannot be less than 25% of gross revenues. ENGLAND's royalty rates are even less.

RE:SOUND offered its willingness to negotiate the proposed 2011 fee structure. "I would encourage them and any other services to come forward to the hearing before the copyright board," RE:SOUND Pres. IAN MACKAY said. "Ultimately, it's up to the copyright board to determine what is effectively the fair market value of these rights."

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