U.S. court decision increases royalty rates for online radio stations

Posted on: December 18, 2015

“A panel of federal judges has ordered Pandora Media Inc. and other Internet radio stations to pay higher royalties for sound recordings,” writes Ryan Faughnder in Wednesday’s (12/16) Los Angeles Times. “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. [Pandora], which went public in 2011 and has 80 million users, has never turned an annual profit…. The decision appeared to mark a compromise between the wishes of the labels and the streaming service.” SoundExchange, the music rights organizations representing the record labels, “was asking for 25 cents for every 100 songs, while Pandora was seeking a lower rate of 11 cents…. The board’s decision also affects royalty payments from iHeartRadio … and SiriusXM. Because of a previous court decision, traditional broadcasters including iHeartMedia have paid a higher rate for their webcasts than Pandora. They will now have the same rate…. The ruling does not apply to on-demand services such as Apple Music and Spotify, which have direct deals with the record companies that determine royalty payments.”

Posted December 18, 2015