Pandora, Online Radio Stations Saved


After a two-year court battle, music companies and online radio stations finally agreed on a royalty payment deal today, reports the NYTimes.

The deal, which applies to songs streamed between 2006 to 2015, stipulates online stations will be charged royalties depending on their size.

Big players like AOL and Pandora will pay either 25% of revenue or a fee per song, whichever is higher.

If it’s the per song fee, they’ll pay .08 cents per song streamed in 2006. The fee will jump to 0.14 cents per song streamed In 2014.

Smaller sites with revenues below  $1.25 million will pay 12 -14% of revenue. 

The legal battle between the stations and music companies began when the Copyright Royalty Board ruled that all Web radio stations would have to pay a 0.19 cents per song streamed fee in 2010. The stations opposed the fee, saying it would cost most of their revenues.

In exchange for the lower fees, the stations agreed to provide more information to SoundExchange about the music they stream and the number of people who listen to their stations. SoundExchange is a non-profit that collects digital royalties on behalf of artists and labels.

The Times notes Pandora founder Tim Westergren’s reaction to the deal:

“I don’t think anyone’s going to look at this and say, ‘I’m really happy, I got everything I want,'” Mr. Westergren said, but he added that he was relieved that the new per-song fee was low enough that Pandora and similar sites will be able to survive.

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