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. Andrew
    July 07, 2009 at 1:00pm
    $.99 is nothing and well worth the service. I work in a small business and stream a lot of music (It will not surprise me to hit my 40 hours within 1 week), since it's generally nice to have something to listen to.
  2. Dock Hoilman
    July 07, 2009 at 1:02pm
    Congratulations... It's an interesting event that this occurred today. While music is a huge part of my life, I rarely tweet about it, but I find it no coincidence that this has happened. To repeat words that may not be immortal, but nonetheless, true... "It's amazing what a little tune can do... I DEFINITELY believe that the Lord uses music... He often speaks to me there. Thanks Lord!" Thank you PANDORA for being used in a great way! God Bless!
  3. Scott
    July 07, 2009 at 1:04pm
    Hazzah!
  4. fooby
    July 07, 2009 at 1:07pm
    How can listening 1.3 hours a day qualify as a "heavy" user? Not fair
  5. Beth
    July 07, 2009 at 1:08pm
    Congratulations! I will gladly put down a dollar if I go over 40 hours a month. This is a huge accomplishment and you guys deserve a pat on the back. Thanks for everything you do to bring us this awesome music! you are greatly appreciated.
  6. Charlie M
    July 07, 2009 at 1:09pm
    Good work just remember if you can do it in the US you now have the leverage to do it to the rest of the world. We still miss you over here in the UK
  7. Benjamin Mejia
    July 07, 2009 at 1:17pm
    I thank you so much Pandora for all these years of giving me the way of listing to my kind of music the way it was supposed to be heard. I say this because my type of music is of a hardcore Hip~hop type which is mostly [Parental Advisory Explicit Content] therefore giving me the chance ti listen to my music as it is meant to be unlike most Online music where they give you only the clean version which infarct takes away most of the plot of the music. Thanks Benjamin Mejia.
  8. Coleman McCormick
    July 07, 2009 at 1:18pm
    Great work! I'm extremely happy to see that you guys have worked around all of this to continue streaming. The unfairness of the royalty laws is absolutely baffling, but that's not saying anything new. It just stuns me that folks in charge of these things don't see how ridiculous they're being. How about when a customer enters a movie theater, he/she just pays a price that scales with his/her height or weight or age? That's about as logical as the way they charge royalties for forms of radio...
  9. jessica
    July 07, 2009 at 1:25pm
    Well...I knew it couldn't last long...I guess somebody's always trying to make a buck! It's not the price that bothers me, it's just the principle of the matter...I looked forward to enjoying free pandora while at work or home and I will now be limited to my own personal bliss and quite frankly....im pissed!!!
  10. Tisha
    July 07, 2009 at 1:26pm
    Congrats - I am very happy for Pandora! Yippee!

Comments are closed.