Analyst Says Congress Should Raise Pandora Royalties
     

At least one media analyst isn’t a fan of the bill aimed at lowering music royalties paid by Internet audio services.

Instead, BTIG media analyst Richard Greenfield says the measure introduced into Congress by Rep. Jason Chaffetz should raise royalties charged to Pandora.

Pandora has said it pays more than 55% of its revenue in royalty fees;

The Wall Street analyst told clients that’s partly because Pandora has chosen to limit ads on its music channels.

He questions Pandora’s business model, noting that every song listened to on Pandora carries a real cost and that cost is increasing every year.

Pandora’s Tim Westergren too, notes that cost is going up as the company’s product has become more successful. He’s been lobbying Congress to bring down Pandora’s music royalty fees in advance of the next rate discussions, set to begin in 2014.

The musicFirst Coalition — which represents recording artists, musicians and labels — opposes the Chaffetz bill, saying the measure shifts the royalty cost from companies like Pandora to artists.

 


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