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Radio News (more headlines) 11-11-2012

Songwriters And Music Publishers Call Foul On Pandora's Efforts To Further Lower Songwriter Compensation

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After months of aggressive lobbying for Congress to lower the rates it pays record labels and artists, Internet radio provider, Pandora, yesterday filed a lawsuit asking U.S. District Court for the Southern District of New York to lower what it pays songwriters and music publishers – currently only four percent of Pandora's total revenue.

"It's outrageous Pandora would try to reduce the already nominal amount they pay songwriters and music publishers, when Pandora's business model is based entirely on the creative contributions of those songwriters," said David Israelite, president and CEO of the NMPA. "To file this suit at the same time that Pandora's founders are pocketing millions for themselves adds insult to injury."

Pandora's lawsuit seeks a blanket license fee that would permit Pandora to play all ASCAP songwriter songs on its music service at rates below what Pandora is currently paying. Related federal legislation introduced in September would change how the U.S. Copyright Royalty Board calculates the rate Internet radio services must pay, substantially lowering the rate Pandora pays to artists. Congressional hearings on the topic are slated for late this month.

Continued Israelite, "Royalty rates should protect songwriters and compensate them for their significant contribution to the success of music services like Pandora. As this area of the market grows, we need to ensure that songwriters are protected, and that they are appropriately compensated for their work."

In 2011, Pandora reported revenue of $338 million with a market cap of nearly $1.6 billion. Pandora currently pays songwriters and music publishers a smaller percentage of music royalties than any other digital music service.

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