In the bitter debate over Internet radio royalties, the positions of the major music companies, broadcasters and technology companies have been made abundantly clear. Even the N.A.A.C.P. has taken a stand. But for the most part, the voices of the artists who stand to be most affected by these changes have been absent.
That changed on Wednesday with an open letter signed by more than 100 artists criticizing Pandora Media and the royalties bill it has championed, the Internet Radio Fairness Act, which would change the way a panel of federal judges sets royalty rates for services like Pandora.
“Pandora’s principal asset is the music,” says the letter, whose signers include stars like Billy Joel, Jackson Browne, Rihanna, Sheryl Crow, CeeLo Green and Don Henley. “Why is the company asking Congress once again to step in and gut the royalties that thousands of musicians rely upon? That’s not fair and that’s now how partners work together.”
The letter was publicized by the MusicFirst Coalition, a music industry group that represents record companies, a major musicians’ union and others. It will also be published as an advertisement in the next issue of Billboard magazine, paid for by MusicFirst and SoundExchange, an organization that collects royalties for satellite and Internet radio and also represents artists and record labels in rate-setting litigation.
In response, Tim Westergren, Pandora’s founder, said in a statement that for the Internet radio industry to survive, a “permanent fix” to the rate-setting process is needed. After the panel of judges, the Copyright Royalty Board, last set rates in 2007, Pandora complained that the fees would be ruinous, and successfully negotiated a temporary discount on those rates, which expires in 2015.
“Passage of the I.R.F.A. will mean more jobs in a sustainable industry, more choices for listeners, and more opportunities and revenue for working artists and their record labels,” Mr. Westergren said. “When the digital music sector is allowed to grow and innovate, everybody wins.”
Like the N.A.A.C.P. letter, which was sent to members of Congress this month, the musicians’ letter puts public pressure on Pandora to reconcile with the music industry. Until now, musicians had been quiet about the bill, and, for the most part, Pandora, which has 175 million users, has enjoyed a positive reputation among musicians. Indeed, the letter begins: “We are big fans of Pandora. That’s why we helped give the company a discount on rates for the past decade.”
But the bill has galvanized the broader music industry. As echoed in the musicians’ letter, the industry contends that the current rates are fair and that there is no need for Congressional intervention; Pandora and others argue that the rate-setting process is unnecessarily complex, and punishes Internet radio with burdensome licensing fees.