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. Zach Shepherd
    July 07, 2009 at 1:32pm
    Sounds like a very reasonable resolution. Would it be possible to add a way to view usage? This would allow users to see the 40-hour-mark coming. Also, would it be possible to give users more control over when the "empty room" message shows up? The maximum could (should?) stay the same, but it would be useful to have the option to reduce it to, say, half an hour to avoid using up one's 40 hours when Pandora is accidentally left playing. Lastly, what measures (if any) will be put in place to prevent people from just switching to another account at the 40 hour mark? Clearly, some users will attempt to use multiple accounts to bypass this restriction. When developing these measures, please keep in mind that some of us are in college and/or professional settings where external IPs are shared because of either dynamic allocation or proxies and where computers are sometimes shared in lab environments.
  2. Jason
    July 07, 2009 at 1:33pm
    I assume the reason most people listen to this website is because its free. I am sure you are aware that as soon as people start getting charged to listen, they will just move onto another site. Sorry, but I may have to do the same if this happens to me.
  3. Joe E
    July 07, 2009 at 1:33pm
    Many props for this... Supporting artists and listeners at the same time. Nice middle ground. -Joe
  4. Robert Roskam
    July 07, 2009 at 1:51pm
    Excellent news! I'd wondered what had happened to this news tidbit. And I'm glad to hear things sorta got ironed out.
  5. Amroth
    July 07, 2009 at 1:55pm
    Great work all around! The $.99 fee shouldn't be a burden to anyone, and I look forward to ordering Pandora One when finances permit; until then, I can forego a single soda to continue listening to Pandora.
  6. Tony
    July 07, 2009 at 2:00pm
    I'm glad to hear that you've got a stable royalty level that allows you to continue to operate and grow. Long live pandora.com!
  7. Mike Templeton
    July 07, 2009 at 2:19pm
    It's a shame Pandora has been put through this situation at all, but I am glad to see a resolution has been reached. I subscribed to Pandora One a few months ago and will gladly renew in the coming years. I love the service you provide and the way you enable us to listen to the music we love. Keep doing what you do and I'll be a longtime fan.
  8. pixites
    July 07, 2009 at 2:50pm
    free at last! holland (aka the netherlands; here is...pandora?)
  9. Rafael Rivera
    July 07, 2009 at 2:55pm
    Great news. I'll ask the hard question, though: Will Pandora be toning down the recent explosion of adverts?
  10. Sheldon
    July 07, 2009 at 3:11pm
    Cheers! I've been eagerly awaiting news of the royalty resolution. I'm a Pandora One member. I love it. I actually started buying music after years of not being interested after finding stuff I liked on Pandora. Does it help you when I click on the buy from amazon through you versus just going through the site? The only thing I'd seriously like to recommend is a sleep timer function in the iphone app. As it stands a LOT of money is being wasted on the bandwith for those of us that fall asleep to pandora. A sleep timer might save you some money from us... and maybe even a "wake up timer" so you could have it cut off during the night and start back up right before you wake up. Be slick for the 3.0 update that you should be releasing soon!

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