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100+ Artists Oppose Pandora’s ‘Subsidy’

The perennial music royalty issue is to get yet another airing before Congress this fall, though no hearing date has been set

Artists opposing the Internet Radio Fairness Act are becoming more vocal.

More than 100 artists have signed a letter to be published in a music trade magazine opposing what they say is Pandora’s plan to “cut artists’ pay when music is played over Internet radio.”

Artists organized by musicFirst and Sound Exchange continue to question Pandora’s support for the bill, meant to equalize music royalties among digital audio services like Pandora.

While the artists praise Pandora’s success, with “massive growth in revenues and a successful IPO under its belt, they asked why Pandora is pushing Congress to slash musicians’ pay.”

Pandora executives have said that currently their music royalties eat up 50% of the company’s revenue, something Wall Street analysts have said isn’t a business model for success.

Pandora and several other groups, including some broadcasters like Clear Channel, Salem and Cox, as well as trade groups like CEA and Digital Media Association support the act, while record label-backed musicFirst and royalty collection group SoundExchange oppose that measure. They support competing legislation which would reset royalties for all entities that stream, including broadcasters.

“These artists have joined together to tell Pandora it’s time to go back to the drawing board. We all want Internet radio to succeed, but it won’t if it tries to do so on the backs of hard working musicians and singers,” said musicFIRST Executive Director Ted Kalo.

The perennial music royalty issue is to get another airing before Congress yet this fall, though no hearing date has been set.

Due to the short legislative calendar the arguments heard now will really tee-up the issue for the next Congress, beginning in January.