For more than two years now I have been eagerly anticipating the day when I could finally write these words: the royalty crisis is over!
Webcasters, artists, and record labels have reached a resolution to the calamitous Internet radio royalty ruling of 2007. Pandora is finally on safe ground with a long-term agreement for survivable royalty rates. This ensures that Pandora will continue streaming music for many years to come!
Many people played a role in getting here. Pandora listeners provided support in extraordinary numbers in Congress, and a group of reasonable and constructive voices on the label and artist side of the table (groups like A2iM) helped forge a middle ground that, while perhaps not meeting all of our aspirations, still represents a thoughtful and reasoned outcome under the circumstances.
For this we are truly thankful and want to express our deepest gratitude to everyone involved.
The revised royalties are quite high – higher in fact than any other form of radio. As a consequence, we will have to make an adjustment that will affect about 10% of our users who are our heaviest listeners. Specifically, we are going to begin limiting listening to 40 hours per month on the free version of Pandora. In any given month, a listener who hits this limit can then opt for unlimited listening for the remainder of that month for just $0.99. In essence, we’re asking our heaviest users to put a dollar (well, almost a dollar) in the tip jar in any month in which they listen over 40 hours. We hope this is relatively painless and affordable–the same price as a single song download. (Alternatively, they can upgrade to “Pandora One”, our premium version which offers unlimited monthly listening in addition to its other benefits).
We hate the idea of limiting anyone’s listening, but we have no choice but to react the economic realities of the new rates.
There continues to be royalty-related activity in Washington DC. On the heels of the above resolution, there is a new effort in Congress to fix the broader issue of how musical artists are compensated across all forms of radio. The system as it stands today remains fundamentally unfair both to Internet radio services like Pandora, which pay higher royalties than other forms of radio, and to musical artists, who receive no compensation at all when their music is played on AM/FM radio. We, along with the artists whose music we play, strongly support the establishment of a level playing field, a truly fair system, as articulated in a new bill called the Performance Rights Act (H.R. 848).
It has been an extraordinary couple of years. Believe me, I never thought I’d be donning a suit and tie to walk the halls of Congress lobbying for a bill. Thanks to all of you for your continued support. It is incredibly exciting for everyone at Pandora to see the vision for the company truly beginning to take shape. We are all looking ahead with renewed vigor to the future.
Cheers.
Tim (Founder)

Comments

  1. Matt
    July 07, 2009 at 12:42pm
    Next stop, Canada!
  2. Arvind Satyanarayan
    July 07, 2009 at 12:42pm
    Fantastic News! Congratulations and Thank You to everyone who made this possible!
  3. John
    July 07, 2009 at 12:42pm
    I love Pandora I easily listen to 12 hours of music a DAY I personally wouldn't mind paying 36 dollars a year for Pandora one or the .99 vents my question is do you think access/play will exceed income forcing the service to close due to royalties?
  4. Bruce
    July 07, 2009 at 12:43pm
    This truly is a BIG DEAL! Congrats to you all and as a contributor I look forward to more music for many years
  5. Les
    July 07, 2009 at 12:43pm
    Tim, this is, indeed, excellent news! I have one suggestion: how about allowing any listener to put a buck into the tip jar whenever they feel like it? This way, casual listeners that believe in supporting Pandora can do so? Just a thought. Keep up the great work and service. Les
  6. Gabe Wachob
    July 07, 2009 at 12:46pm
    Great to hear that you've made it through this rather large bump in the road!
  7. Dustin
    July 07, 2009 at 12:50pm
    I am glad to see we can all rest easy. I moved to your paid service about a year ago, before we got much from it. I just wanted to put $36 towards Pandora's survival. I have used your service since it was first introduced and will use it for as long as it is around.
  8. DivinoAG
    July 07, 2009 at 12:50pm
    As someone who used to listed to Pandora all the time, I'm very glad to hear about you getting yourselves on firmer grounds. After attesting the amazing quality of your service, I can only give you my congratulations and hope for a long future to Pandora. I just have one question: does this new agreement changes in any way the situation for other countries such as Brazil (where I live), or so far this only affects the US?
  9. Peter Clough
    July 07, 2009 at 12:51pm
    This is a great step forward for all internet radio programmers and providers. Thanks Tim for all your efforts, they benefit each of us who work in this business. As it is said a high tide floats all boats and now, here comes the flood tide! Cheers!
  10. blah
    July 07, 2009 at 12:56pm
    Wow awesome

Comments are closed.