![]() ![]() Time spent listening to radio went down 2 percent.Īt the same time, people are buying less music. According to a survey by the NPD Group, people under 35 spent a quarter of their listening time on the Internet in 2012 - up 17 percent from the year before. ![]() "If iHeart Radio's personalized Internet radio service pays a particular rate, we think we're entitled to operate under that same rate."īut the future is clearly in Internet radio services like Pandora. "From our perspective, what we're trying to do is make sure that we operate at parity with our biggest competitors," he says. Harrison says if Pandora gets into the radio business it should pay the same rate as Clear Channel does for its iHeart Radio. But the company still isn't profitable, in part because it pays over 60 percent of its revenues to acquire music. 1 Internet radio service, saw more than $125 million last quarter in revenues - 55 percent more than the year before. It should be said that ASCAP and Pandora are already in court battling over what the Internet radio service claims are unfair business practices. "This is what I would refer to as a stunt - a way to do an end run to reduce the price of what they pay just one more little notch." He says Pandora's purchase of KXMZ isn't going to reduce its rates. Internet radio and terrestrial radio use music and generate revenue in different ways." "The fact is," he says, "they're very, very different models. ![]() Paul Williams, the president of ASCAP, says broadcasters pay the same in royalties for radio and streaming because those streams account for a tiny portion of their audience. Since rights holders were getting money from record sales, they got less from radio royalties. Back when rates were established, playing a song on the radio was considered a free advertisement for a record. Royalty rates are negotiated mostly with rights organizations like ASCAP and BMI, which represent hundreds of thousands of songwriters and music publishers. So, this week Pandora purchased KXMZ, a small adult contemporary station on the main street in Rapid City - population 70,000 - in an effort to get the rate enjoyed by iHeart Radio. "Pandora shouldn't be discriminated against simply because we don't own a radio station," he says. Pandora attorney Christopher Harrison says that's not fair. That's because Clear Channel, which owns hundreds of terrestrial radio stations - pays the same amount in royalties for online streaming that it does for broadcasting the same songs. If his song were played over iHeart Radio - a streaming service owned by Clear Channel - he would get paid even less. "The song earned $1.62 in royalties over a 90-day period on Pandora," he says, "which is a very typical rate." The company says it's aiming to get the more favorable royalty rates given to terrestrial broadcasters, but the move has songwriters and composers up in arms.īlake Morgan is an independent musician whose " Better Angels" was among a number of his songs that got some 28,000 plays on Pandora. Pandora purchased a local radio station in Rapid City, S.D. This week, the Internet radio broadcaster Pandora made what seems like a backward move - technologically speaking. Blake Morgan's songs were played some 28,000 times over a 90-day period on Pandora, earning $1.62 in royalties.
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