Why Pandora Isn’t Panicked About Its 20% Royalty Rate Hike



A 20% Increase in Artist Royalites Means Even Thinner Margins For The Internet Radio Station, Luckily, The Compoany Has a Plan B


By John Paul Titlow
December 17, 2015

Pandora is not thrilled. In a much-anticipated ruling, the three-judge Copyright Royalty Board (CRB) ruled today that Internet radio broadcasters will have to pay 20% more in royalties to copyright holders and artists. The new rates are another hurdle in the company’s quest for profitability. But thankfully for Pandora, the company has been planning for this all along.

Starting next year, each song streamed on Pandora will cost the company $0.0017. Currently, the company pays $0.0014 per stream on its free, ad-supported service (and $0.0023 for songs streamed to paying premium users). Pandora was pushing for its per-stream rate to drop to $0.0011, while the music industry—represented in this particular battle by SoundExchange—was gunning for an increase to $0.0025. The CRB decided to meet the parties halfway.

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