Pandora switches course in its royalty fight with the music industry

Faced with a formidable new competitor in Apple’s iTunes Radio, Pandora, the Oakland online radio company, has switched course in its lengthy battle with the music industry over how much it pays in royalties.

The company is giving up pursuing federal legislation, according to reports this week. The legislation, the Internet Radio Fairness Act, would reduce rates webcasters like Pandora pay to rights holders. The bill’s sponsor, Rep. Jason Chaffetz, (R-Utah), hasn’t said what he will do now that the bill’s biggest booster has apparently abandoned the effort.

Instead of going to Congress, Pandora is expected to focus on the next review by the Copyright Royalty Board,  which sets the rates webcasters pay, according to Billboard. The publication also quotes a Pandora representative saying that the firm may negotiate directly with labels. Apple did that with iTunes Radio, but Apple doesn’t have to worry about revenue.

Lobbyists who represent artists and labels cheered the development, says The  Hill. But it’s unclear whether Pandora can repair its relationships with the industry enough to actually negotiate with music executives, writes Hypebot. 

Given the clear antagonism between major labels and Pandora, they may eventually face having to negotiate directly with companies that might be happier if they die.

 

Photo: The front desk at Pandora’s offices in Oakland. (Bay Area News Group archives)

Michelle Quinn Michelle Quinn (178 Posts)

Michelle Quinn is a Business Columnist at the San Jose Mercury News. Prior to her current role, she was the Silicon Valley correspondent at Politico covering tech policy and politics. She has also covered the tech industry at the Los Angeles Times and the San Francisco Chronicle. She was a blogger for the New York Times.