Copyright Royalty Board Announces Ruling

Pay Up? The Copyright Royalty Board ruled yesterday that starting January 1, 2016, and effective through 2020, Pandora and other Internet radio stations must pay rights holders 17 cents per 100 plays of a song. That's an increase, albeit small, from the previous 14 cents per 100 plays.

SoundExchange declared that "the rates set by the CRB do not reflect a market price for music and will erode the value of music in our economy." The digital rights organization was pushing to raise it to 25 cents per 100 plays. Pandora was hoping for a drop to 11 cents, though CEO Brian McAndrews called it "a balanced rate that we can work with and grow from." The ruling provides the internet service more leeway to make deals directly with labels and publishers. In the past few weeks it has announced agreements with Sony/ATV Publishing, SONGS Music Publishing, and Warner/Chappell Publishing.

Ryan Faughnder from Los Angeles Times wrote a great breakdown of the ruling. Read it here.

Pandora CEO: Music Shouldn't Be (Completely) Free

As Pandora preps to enter the on-demand streaming battle royale, CEO Brian McAndrews is taking jabs at the freemium business model espoused by Spotify and YouTube.

In a recent op-ed in Business Insider, McAndrews explained the somewhat obvious challenges the transition from physical to digital has created for music companies.

Years ago, if anyone could have walked into a record store, legally taken every record home for free, and listened to the exact songs they wanted for as long as they chose, the music industry model would have completely broken down. But that is exactly the situation the music industry faces today.

Free-to-the-listener on-demand services are driving down music’s intrinsic value by creating a “gray market.” By that I mean a market where listeners can perpetually access licensed, free, on-demand music. An ever-growing number of listeners are happily lingering in music’s gray market, enjoying full access to all music without paying for the privilege and with little incentive or intention to convert to a full-paying subscription.

It's a very public hint at how Pandora might leverage its massive base of listeners to monetize a forthcoming on-demand streaming service, and most certainly a peace offering as the company preps to negotiate new on-demand licenses with labels and publishers.

Pandora Buys Pieces of Rdio

Pandora announced plans yesterday to purchase $75m worth of assets (technology, staff) from @rdio, which is filing for bankruptcy. The beleaguered Rdio was praised for its interface and usability as an on-demand streaming service, but could never quite compete on the scale of heavy hitters like Spotify, YouTube, and Apple Music.

The move signifies Pandora's entrance into battle royale for control of the on-demand streaming market. Music Business Worldwide has a full rundown on the deal and what it means for everyone else in the game.

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