With a major, bottom line-impacting decision on royalty rates imminent, Pandora's chief financial officer Mike Herring was feeling brisk during an investor's conference call on Thursday, delivering body blows to Apple Music and even Steve Jobs while offering a look inside his company's future in streaming music.
Soon, the Copyright Royalty Board will decide statutory royalty rates to be paid to labels and artists by non-interactive web radio stations like Pandora over the next five years. According to Herring, Pandora paid 40 percent of its Q3 revenue to the labels, "so it's a big deal." Pandora wants to lower its rate from 0.14 cents per stream to 0.11 cents per stream. SoundExchange, which collects and distributes those royalties, wants a rate of 0.25 per stream.
"I think that business will continue to operate very effectively no matter what those rates are," he said, according to a transcript via Seeking Alpha. "What we want is a fair and reasonable rate. We think actually that copyright holders, artists, deserve to be compensated for us playing their music. We don't dispute that at all and we want it to be a fair and a rational dollar amount."