Copyright Royalty Board Hikes Rates Pandora Must Pay

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The Copyright Royalty Board has ruled that Pandora and other online radio companies will have to cough up more money to the music labels starting January 1st.

The Copyright Royalty Board on Wednesday ruled that online radio companies will have to pay 17 cents per 100 plays of songs through 2020. That's a notable increase over the current rate of 14 cents per 100 streams. The new rates take effect Jan. 1. “We believe the rates set by the CRB do not reflect a market price for music and will erode the value of music in our economy,” said a statement from SoundExchange, the music rights organization representing the record labels.
 
Looks like we have a lot more Pandora commercials incoming. It doesn't sound like they are really taking into account all of the sales generated from the new music Pandora is able to expose people to.
 
So that quote basically just literally said..... we aren't getting enough money.
 
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I think this might drive Pandora out of business, that last rate hike nearly killed them. Why is Internet radio different from broadcast radio again? (Broadcast radio doesn't have to pay royalties).
 
Quix said:
Why is Internet radio different from broadcast radio again? (Broadcast radio doesn't have to pay royalties).
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Especially considering that internet radio is more expensive because every listener is using more bandwidth, whereas traditional radio broadcasts are the same whether there are 5 or 5,000,000 people listening.

Yet at the same time, internet radio brings the listener much closer to a potential purchase - in many cases only a few clicks away. Compare that to traditional radio where at best you will just make a mental note that you like a certain song, and that's only if your FM radio actually even displays the FM metadata, otherwise you might not even be able to buy it, because you don't even know what you just listened to :rolleyes:
 
Quix said:
I think this might drive Pandora out of business, that last rate hike nearly killed them. Why is Internet radio different from broadcast radio again? (Broadcast radio doesn't have to pay royalties).
Click to expand...

I think they pay some sort of all inclusive fee, not based on the number of plays. Perhaps this is a historical relic from a time when record labels were flush with cash.
 
Screw Pandora, I wanna know what this will do to iHeart.
 
FndTheRver said:
I think they pay some sort of all inclusive fee, not based on the number of plays. Perhaps this is a historical relic from a time when record labels were flush with cash.
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It's a relic from when the labels would pay for play to push certain singles so that they could sell $22 albums full of quickly-made junk. A time where artists were forced to go to a label with terrible contract margins (some would come out of a successful tour with debt to the label).

They're still pissy over that whole consumers having a choice thing. Buy a single for $1? The f you say!? Blasphemy!
 
Steve said:
“We believe the rates set by the CRB do not reflect a market price for music and will erode the value of music in our economy,”
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Based on how much the last rate increase hurt the internet radio companies, you are already getting better than market rate.
Go ahead an raise the rates, and you will start seeing the money you get from internet radio stations fall as people either get tired of all the commercials or the stations fail due to money losses.
I'm fine just listening to my existing MP3 collection. No commercials and no desire to buy some new song I just heard.
 
Thats a sound business model, raise rates that put companies out of business. No longer a revenue stream incoming. Now customers go back to pirating, sounds like a win win to me.
 
AK0tA said:
Thats a sound business model, raise rates that put companies out of business. No longer a revenue stream incoming. Now customers go back to pirating, sounds like a win win to me.
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Agreed. I haven't pirated for ages since online stores and podcasts / streaming satisfied me. If they're going backwards, I'm going backwards also.
 
As a sidenote: downloading copyrighted works out of internet for personal use is perfectly legal in my country. Sharing is not.
 
At one time, the record labels were very prosperous. Doing great. Now, a lot of industries are down. They are trying to get back to those "good ol' days" by raising rates. The industry is changing, but rather than adapt, they are just using old practices (raising rates for others that are pushing change) to increase their value. :(
 
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