New Congress May Determine Future Of Digital Performance Rates
A new Congress will be seated in Washington the first week of January and one order of business will be the Internet Radio Fairness Act, introduced last year on behalf of Pandora and a host of other online music streaming companies. In reality, the fight has continued on and off for more than a decade, and was renewed recently with proposed legislation that would change the way digital music royalty rates are set. With streaming music starting to account for a significant chunk of the music industry's revenue, and Pandora now a scrutinized public company, the issue has touched a nerve as never before. "This is not just about our present; it is about our future, our ability to make it in the digital age," Cary Sherman, chief executive of the Recording Industry Association of America (RIAA), told the New York Times. "Artists and labels and the entire music community need to earn a fair return on the creative works that are the reason companies like Pandora exist." But Pandora co-founder Tim Westergren counters that argument by saying, "The rate being too high dramatically depresses how much music gets played. It has really suffocated the industry." Rates are set by three judges on the federal Copyright Royalty Board, but they apply a different standard to internet radio services than they do to satellite and cable radio outlets. Sirius, for example, pays 8% of its revenue to record companies and artists, while Pandora can pay over 50% of its revenue. [Full story: New York Times]
| Pandora Sues ASCAP For Blanket Licensing Fee Pandora this week filed suit against the American Society of Composers, Authors and Publishers (ASCAP), seeking a deal to lower licensing fees charged by the organization. Pandora asked a federal court in New York to set a "reasonable" blanket licensing fee similar to that covering the terrestrial radio industry that would cover all songs represented by the 435,000-member group. ASCAP and Pandora reached an "experimental" fee agreement in 2005 that lasted until 2010, and terms of their current arrangement weren't disclosed in the filing. "The license rates and other material terms of the 2005 license agreement were presented to Pandora by ASCAP as being effectively non-negotiable," the company said in court papers. Pandora said the "experimental license agreement" it reached in 2005 for Internet sites and services "was ill-suited and not reasonable." Pandora and ASCAP were unable agree on licensing fees after more than a year of talks. The U.S. District Court in New York has jurisdiction over rate-setting if the parties can't come to terms. ASCAP has declined to comment on the suit. [Full story: Bloomberg BusinessWeek] |
| Emmis Is Testing Smartphone App To Bypass Mobile Data Plan While Emmis Communications recently sold its Emmis Interactive division to Marketron, the Indianapolis-based company retained control of TagStation, a cloud-based engine that supplies data for the smartphone app and digital dashboards. Known as "NextRadio," the new app is being marketed to the wireless industry as a way for consumers to listen to local radio without using their data plan for internet streaming. Paul Brenner, the company's chief technology officer, told Radio World the app leverages the efficiency and scalability of over-the-air radio, "enhanced by the phone's data channel, to deliver an interactive artist and advertiser experience." Other anticipated features include enhanced synchronous ad modes, such as SMS integration and couponing, song tagging capabilities, and social integration. Emmis CEO Jeff Smulyan, who has been a strong proponent of including FM chips in mobile devices, has been trying for several years to get the attention of wireless carriers, and this move is seen as one way the radio industry can demonstrate it can innovate and deliver a superior and consistent user experience. Brenner says the wireless industry is "responding positively" to the combination of TagStation and NextRadio, which is in final beta testing in preparation for a launch on several smartphones and carrier networks. [Full story: Radio World] |
| Is The Digital Music Streaming Universe Becoming Overcrowded? While Pandora and Spotify garner the most attention in the digital music space, numerous other companies are vying for visibility (and users) in the online and mobile marketplace. As noted by Billboard, two of these include MOG, which earlier this year was sold to Beats Audio for $14 million (compared to Spotify's market cap of $4 billion); and Deezer, which has been growing solidly in many parts of the world, and just scored $130 million in new funding. Meanwhile, new services from major market players have entered the race, including Microsoft's new Xbox Music that will play not only on the popular multi-purpose gaming console, but also on Windows Phone 8, Windows 8, and Windows RT tablets. Rara, an Omnifone-backed newcomer, hopes to make a dent in the market by forgoing the "freemium" concept in lieu of a $1/month trial. Samsung just acquired mSpot in order to launch its own unlimited music service, Samsung Music Hub, with a locker, download store, and streaming radio service with unlimited music. Then there's Sony, which recently announced the launch of Sony Music Unlimited, which offers unlimited music on iOS and Android. [Full story: Billboard] |
Al Bell Presents American Soul Music ... And American Soul TV
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