High profile musicians write letter opposing legislation to lower Pandora’s royalty payments

By Daniel S Levine,

Internet radio company Pandora is hoping that a bill that would lower the royalties it has to pay to musicians gets through Congress. A coalition of high profile artists, including Billy Joel, Jimmy Buffett, Katy Perry and Rihanna, have penned a letter opposing the bill.

According to Forbes, Pandora founder Tim Westergren recently wrote a letter to users, asking them to support the Internet Radio Fairness Bill. This would substantially lower the amount of royalty payments Pandora has to make to the labels and artists.

“This bipartisan bill will correct the incredible inequity in how different digital radio formats are treated under the law when it comes to setting royalties,” Westergren wrote. “The difference is quite extraordinary. In 2011, Pandora paid over 50% of our revenues in performance royalties, while SiriusXM paid less than 10%.”

A group of 125 musicians have signed a letter opposing the bill. It was released on Wednesday by musicFirst and the non-profit organization SoundExchange, reports Reuters. The letter will also be published in the print edition of Billboard this weekend.

The letter, titled “A Musicians’ Perspective On Pandora,” notes that many musicians do support Pandora. “Pandora is now enjoying phenomenal success as a Wall Street company,” the letter reads. “Skyrocketing growth in revenues and users.We celebrate that. At the same time, the music community is just now beginning to gain its footing in this new digital world.

“Why is the company asking Congress once again to step in and gut the royalties that thousands of musicians rely upon? That’s not fair and that’s not how partners work together.”

The letter concludes, “Congress has many pressing issues to consider, but this is not one of them. Let’s work this out as partners and continue to bring fans the great musical experience they right expect.”

Forbes notes that Pandora isn’t the phenomenal Wall Street success that the musicians say it is, though. Today, its stock is at an all-time low, falling to $7.39 a share.

Pandora has not responded to the musicians’ letter.



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