Skip to main content

Copyright Royalty Board: Pandora required to pay 21 percent more in royalties

pandora autoplay premium thumbprint radio
After much deliberation, the law has spoken: online radio service Pandora and other non-interactive online radio services — both big and small — are required to pay artists and labels a higher royalty rate in order use their music.

The U.S. Copyright Royalty Board announced Wednesday that non-interactive online streaming services, including Pandora and iHeartRadio, will have to pay 0.17 cents per streamed song in royalties, a 21 percent increase from the previous rate of 0.14 cents per streamed song. This essentially means that expenses for the streamer with more than 79 million users just increased over 20 percent overnight. (Do note that this ruling doesn’t effect on-demand music streamers like Spotify and Apple Music.)

Related Videos

“This is a balanced rate that we can work with and grow from,” said Pandora CEO Brian McAndrews in a statement. “The new rate structure will enable continued investment by Pandora to drive forward a thriving and vibrant future for music.”

The company may not be viewing this entirely as a defeat, as the decision could have been a lot worse for Pandora.  Until now, the radio streamer had been paying 0.14 cents per stream and was lobbying to reduce the rate to 0.11 cents per stream. Royalty distributor SoundExchange, which pays labels and artists, wanted to raise the rate to 0.25 cents per stream.

The CRB decision is certainly a blow to Pandora, though. The company’s CFO Mike Herring recently noted that Pandora paid 40 percent of its revenue to labels. Under the terms of this new decision which goes into effect in 2016, royalty expenditures would be a significantly larger share of the streamer’s revenue.

The increased rate is only for “non-subscription” services, meaning the free, ad-supported version of Pandora. The rate for “subscription” services, the paid ad-free version of the service, is actually decreasing under the new CRB decision (from 0.25 cents per streamed song to 0.22 cents per streamed song).

Even prior to the decision, Pandora realized that it couldn’t focus solely on Internet radio. This fall, the 15-year-old music company made two major acquisitions: ticketing company Ticketfly for $450 million, and the assets of on-demand streamer Rdio for $75 million.

Editors' Recommendations

Lossless Bluetooth audio? Qualcomm says it’s coming in 2022
A man listens to his cell phone audio via bluetooth headphones.

Qualcomm has revealed its next-generation Bluetooth chips for makers of wireless earbuds and headphones, and the company predicts that 2022 will be the year that we see a whole slew of new innovations like lossless hi-res audio, audio sharing, lower latency, and Bluetooth broadcasting come to our phones and personal audio gear.

The giant mobile chipmaker says that its two new sound platforms, S3 and S5, will be provided to customers like Yamaha, Cambridge Audio, Master & Dynamic, and Audio-Technica -- just to name a few -- and that we can expect to see the first S3- and S5-based products by the second half of 2022.

Read more
Amazon Music is now available on Vizio TVs
Amazon Music on a Vizio TV.

Amazon Music is now available as a native app on Vizio televisions. The inclusion of the app for SmartCast -- Vizio's built-in operating system -- means that you'll be able to stream more than 2 million songs for free on the third-largest music streaming service in the world without having to resort to Bluetooth or AirPlay or some other workaround. You'll also be able to stream Amazon Music Unlimited, which ramps things up to more than 75 million high-definition songs.

“With millions of users across the country, Vizio is an obvious choice for Amazon Music to expand our service into the homes of music fans,” Karolina Joynathsing, director of business development for Amazon Music, said in a press release. “We look forward to our customers being able to easily listen to their favorite music on Vizio smart TVs starting today.”

Read more
How to master your equalizer settings for the perfect sound
An equalizer on Apple Music's desktop app.

Contrary to what those bottle DJs on YouTube would have you believe, mixing sound isn't just twiddling fake nobs and sliders to make you look cool on the internet. Coaxing the best possible balance of tones out of a piece of music is an art form in and of itself, whether you're a producer, engineer, DJ, or just a music lover with an iPhone and a Spotify account.

The equalizer, or EQ, has come a long way since your dad's graphic EQ with the tiny little sliders that you never quite understood -- but somehow messing with them made his Zeppelin records sound "rad." But for most devices you'll encounter these days, it's all done digitally.

Read more