From Alabama to Rihanna, Stars Fight Pandora on Royalties

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The battle over webcasting royalties went up a notch Wednesday when 125 artists ranging from Alabama to Rihanna wrote an open letter to Internet-radio company Pandora Media over its attempt to change the way the statutory webcasting rates are set.

The two-page letter -- which will run as advertisement in Billboard's next issue -- titled "A Musician's Perspective on Pandora" criticizes the Internet radio giant for seeking a lower statutory webcasting royalty. "Why is the company asking Congress once again to step and gut the royalties that thousands of musicians rely upon?" the letter reads. "That's not fair and that's not how partners work together."

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The controversy is over the Internet Radio Fairness Act, a bill that would implement a new standard for setting statutory royalty rates paid by webcasters. Pandora is one of many webcasters that takes advantage of the Section 114 compulsory license that allows webcasters to operate by paying a statutory royalty to SoundExchange, the organization that collects digital performance royalties for sound recording owners, performing artists and featured artists. A new standard would most likely result in a lower statutory rate for webcasters.

"These artists have joined together to tell Pandora it's time to go back to the drawing board. We all want Internet radio to succeed, but it won't if it tries to do so on the backs of hard working musicians and singers," said musicFIRST Executive Director Ted Kalo in a statement.

Other artists who signed the letter include Rihanna, Katy Perry, Don Henley, Journey, Brian Wilson, Missy Elliot, Billy Joel and Camper Van Beethoven, whose singer David Lowery has been a vocal critic of Pandora and proposed legislation it supports.

The bill will not go to committee this year and will be introduced again in 2013, sources tell Sources also point to a likely hearing on webcasting royalties by the House Subcommittee on Intellectual Property, Competition and the Internet on or around November 27, 28 or 29. No hearing has been announced yet.


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