Pandora: If We're Getting Taxed So Heavily By SoundExchange, Radio Should Be Too

from the strange-bedfellows dept

Well, this is rather disappointing. Just days after caving in and agreeing to new webcaster rates that will harm pretty much everyone, Pandora has gotten right into bed with the RIAA/SoundExchange in supporting the Performance Right Act (the RIAA Bailout Act) to extend a similar unnecessary tax on radio. Pandora's reasoning is no surprise: basically it's saying that if it has to pay such a silly tax to help promote musicians, it's unfair that radio stations get away without paying something similar. But, still, it's disappointing. Rather than looking at adding value to the overall market, Pandora has basically decided that it's "enemy's enemy is a friend" and is supporting such a law simply because it will harm radio stations. This makes me think significantly less of Pandora.

Filed Under: bailout, performance rights act, radio, webcasters
Companies: pandora, soundexchange

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  1. identicon
    Anonymous Coward, 14 Jul 2009 @ 5:41pm

    Pandora is probably one of the most innovative music services ever, and legally is essentially at the recording industry's mercy.

    The current ridiculous rates will probably kill Pandora (and its competitors) eventually, but applying the same rates to the already far more competitive broadcast radio industry will pretty much kill it all instantly (how many radio stations have margins well above 25% now?).

    However you feel about whether radio stations should be paying the recording industry or vice versa, it's in no one's best interest to kill all radio. Using this "level playing field" argument is Pandora's best chance to improve its negotiating position.

    (Personally, on broadcast radio I more or less only listen to NPR and my local classical station (for which, in my opinion, it makes a lot more sense for the station to be paying royalties to the performers, since my being exposed to a piece of music isn't as likely to lead to my buying that particular recording).)

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