A bill introduced in Congress in September that would cut the royalty rates that Internet radio providers must pay to artists has led to some unusual bedfellows. Rihanna, Katy Perry, Brian Wilson, Stevie Nicks, Nas, T.I., Blondie, Billy Joel, and more than 100 other artists have signed an open letter opposing the so-called Internet Radio Fairness Act. They say the legislation would unnecessarily slash payments depended on by musicians.
“Pandora’s principal asset is the music,” says the letter, whose signers also include Robert Plant, Common, Sheryl Crow, Cee Lo Green, George Clinton, Duff McKagan, Missy Elliott, John Fogerty, and Janelle Monáe. “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 now how partners work together.” The letter, which will appear in Billboard, was first published by groups SoundExchange and the musicFIRST Coalition, which argue the bill could reduce royalties to musicians by 85 percent.
As the New York Times explains, Internet radio provider Pandora Media is a champion of the bill, joined by Clear Channel Communications and a range of technology groups. Supporters of the legislation say it would end an unfair discrepancy between Internet radio royalty requirements and the lower royalties paid by satellite radio services and other digital providers. Pandora pays 4 percent of its revenues in royalties, compared with 1.7 percent for broadcast radio stations, which also enjoy special deductions.
Pandora founder Tim Westergren was not deterred by musicians’ opposition. In a statement quoted by the Times, he indicated the Internet radio industry would collapse without a “permanent fix” to keep royalty rates from rising. Pandora successfully obtained a temporary reduction on rates set by a panel of judges in 2007, but the discount ends in 2015. Westergren argues lower rates for Internet radio companies like his will create jobs and lead to more money for musicians.
Read more: Spin