Pandora’s profits could depend on this obscure panel
When three federal judges meet in Washington, D.C. Wednesday, they’ll decide a seemingly small matter: how many cents 100 plays of a song are worth. The Copyright Royalty Board sets the rates that internet radio companies like Pandora pay the music industry and artists they represent. That rate is currently 14 cents for every 100 plays of Mariah Carey’s holiday classic “All I Want for Christmas is You” or Drake’s viral hit “Hotling Bling.” While it doesn’t sound like much, it adds up quickly.
“Pandora last year paid over $400 million in these royalties,” said New York Times reporter Ben Sisario who’s been covering the legal case. “Just the tiniest tweak of these rates really can make a huge difference for Pandora, of course, but also for musicians.”
Pandora wants the Board to lower rates, which it argues could cause the tide to rise for all the boats in the streaming music world: artists, labels and streaming companies alike. The industry, meanwhile, is getting impatient with that growth and would rather receive higher rates per 100 plays. Pandora is among the more successful digital music companies, but publicly-traded Pandora has yet turned a profit.
Nor has Spotify, Sisario noted.
“It’s often thought that Apple is really one of the only companies that’s able to that, and the way they do that is through selling billions of dollars worth of iPhones,” Sisario said.
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