Toby Keith, singer and songwriter, performs at gathering of music publishers
Where's the harmony in the music sector?
David Israelite, CEO of the National Music Publishers Association (NMPA), tonight interrupted his state-of-the-industry speech at the group's annual meeting in Manhattan to lash out at Pandora's decision to acquire a radio station in South Dakota. "Pandora is going to pursue lawsuits and gimmicks," Israelite told the hundreds of songwriters and composers in attendance. "Pandora is hoping to fraudulently sneak in the back door. Any shred of credibility that Pandora had is gone. They are at war with songwriters "
Pandora is going to pursue lawsuits and gimmicks
Pandora's move was largely a publicity stunt designed to bring attention to what it claims is unfair treatment by the music industry. The company wants to pay lower royalties for the music it plays and was trying to draw attention to the fact that traditional broadcast stations don't pay any royalties at all, though they do pay to deliver music over the Web. Pandora said that owning a terrestrial station should give it access to cheaper royalty rates. In reality, the company acknowledged that the radio station won't impact the company's balance sheet in any significant way.
The lawsuit that Israelite was referring to is the complaint Pandora filed in November against the American Society of Composers Authors and Publishers (ASCAP). Pandora claims the performance-rights organization overcharges the company.
"Any shred of credibility that Pandora had is gone."
Pandora has been at war with much of the music industry for nearly a year, ever since the company backed federal legislation that would lower the royalty rate that webcasters are required to pay under law. Instead of the market deciding how much in royalties a digital service pays, Congress does. Pandora says that the rates are unfair, but on Capitol Hill the company's plea for help fell on deaf ears. At a congressional hearing, songwriters noted that Pandora's founders pocketed millions after the company went public. Meanwhile, the company compensated songwriter Linda Perry, the woman who wrote the Christina Aguilera hit song Beautiful, $349 for more than 12 million spins on the radio service.
The battle between Pandora and the rest of the industry is far from over. Music industry sources say that they expect Pandora to push for a new bill later this year.