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Friday, September 13, 2013
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Pandora vs. Radio Industry Hyperbole

Let's start by stating that "Pandora," beside being the largest internet radio company, is a metaphor for the online radio industry.

Broadcast radio often uses Pandora when referring to internet radio. It most recently had complaints with "P" trying to lower royalty fees by purchasing one station in South Dakota. In doing so, Pandora may take advantage of lower rates afforded the radio industry, online.
"Those who will be hurt the worst are artists associated with labels too small to get the attention of Clear Channel and its small band of radio industry peers."

When the Pandora station purchase was announced, radio trades set fire to the concept; the terms "ploy" and "scheme" were used to describe Pandora's attempt to join the broadcasters. How owning only one station could qualify the company for lower ASCAP, BMI, and royalty rates was the main question. And this, ladies and gentlemen, brings us to the meat behind today's comments.

Literally every radio industry trade published yesterday's "landmark" deal between Clear Channel and Warner Brothers Music. One asked, "Does this take some pressure off Congress and the long-stalled push for a performance royalty bill? Yes." It's interesting to note that nearly every radio trade read the same, as most used the same quotes from CC's press release (read here).

Clear Channel-owned Inside Radio was bold enough to state, "The agreement may reduce likelihood of a government-mandated radio royalty." These words appeared under the headline, "Landmark deal may change Washington’s royalty focus." Funny how the definitions of "ploy" and "scheme" change depending on when the words are used, and by whom.

According to a July 25, 2013 Clear Channel press release, the company now has the following signed to a "Digital and Broadcast Revenue-Sharing" deal: Big Machine Label Group, Glassnote Entertainment Group, eOne, Dualtone, DashGo, rpm Entertainment, Robbins Entertainment, Naxos, Wind-up Records, Fearless Records, and Zojak World Wide. It also has Fleetwood Mac under an agreement for its latest album release.

There are a few other radio groups (very few) signing similar deals with a smaller number of little labels: Beasley Broadcast, Entercom, and, I think, Greater Media. (If you know any to add to this list, please forward the names.)

Here's what is not being mentioned anywhere within the radio industry, though, and what I find most annoying: With over 13,000 commercial radio stations and a large number of smaller radio groups, from the vast majority there's no movement being made between labels and artists to come to a royalty agreement. Rephrased: Only a few radio groups conjoined with a few small record labels constitute the claimed forward movement towards a performance royalty agreement.

So, what gives anyone in the radio industry, ASCAP, or any company associated with broadcast radio a right to claim that Pandora's purchase of a single station to establish itself as a "broadcaster" is a "scheme"?

Internet radio is being forced to pay performance royalties that far exceed anything reasonable. When placing its payment structure next to what broadcast radio pays, we all see it's downright unfair.

For internet radio owners, with the pararmeters set by Inside Radio's claim that "Landmark deal may change Washington's royalty focus," it seems a slam dunk for hyperbole to run rampant on both sides. Pandora, or any internet radio group, should be able to buy a single station and seek equality with its broadcasting peers.

If the broadcast sector can say it is on the way to establishing "deals" with labels, then it must accept that Pandora's purchase of its first broadcast station is on par with forward movement made in royalty deals.

Those who will be hurt the worst are artists associated with labels too small to get the attention of Clear Channel and its small band of radio industry peers. CNet said it best with this: "Expect to start hearing more CeeLo Green on iHeartRadio." Internet radio must start aligning itself with indie artists in numbers that make a difference, and quit waiting for a White Knight to ride onto the scene to save their day, and protect their wallets.

A page by the American Television Alliance places this issue of royalties and broadcasters in perspective. It speaks of Les Moonves' comments concerning CBS' recent retransmission agreement with Time Warner. (See full page.)

The radio industry may either speak using hyperbole or the truth. It just can't do both at the same time, as we see in discussions on its making deals with labels.

The internet radio industry should not sit silent on this issue.

Today's indie artist introduction is to...
A Country artist to consider:
Andy and the Rockers

sample song
Down Home Kentucky

Download Song


We listen for songs that evoke emotion; fast, slow, female, male, group, it doesn't matter. When an artist has the power to please, they should be given a chance to be heard.

Give Andy and the Rockers's "Down Home Kentucky" a listen.

Add it to your playlist, free! Such is the new world of music distribution.

It's time internet radio programmers reach into a huge pile of untapped talent.
It is here where new hit songs will increasingly be found.

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