Pandora, SAG-AFTRA, SoundExchange React To New Webcaster Rates

After the Copyright Royalty Board set the rates last week for webcasters, several music companies and services released statements to weigh in on the decision. In 2016, the rate for non-subscription services will $0.0017 per performance, and for subscription services, it will $0.0022 per performance. For the remainder of the term (through 2020), the prices will be adjusted according to the Consumer Price Index.

Pandora: “This is a balanced rate that we can work with and grow from. The new rate structure will enable continued investment by Pandora to drive forward a thriving and vibrant future for music,” said Brian McAndrews, chief executive officer of Pandora. Working collaboratively with partners across the music industry is a top priority as we connect listeners with music they love, and artists with their audience. This decision provides much-needed certainty for both Pandora and the music industry. We are moving full-steam ahead with our ambitious plan to continue to build the world’s most powerful music discovery platform.”

SAG-AFTRA: SAG-AFTRA is disappointed with Wednesday’s ruling by the Copyright Royalty Board on webcasting rates. At this critical juncture, when the impact of changing technology is being acutely felt by artists, this is an unfortunate step backwards that cheats creators.Recording artists deserve to be equitably compensated, and the CRB has provided a huge discount to webcasters at artists’ expense — driving down the value of music by 30 percent. Many broadcasters’ businesses are built on the use of music and they already pay nothing for it on terrestrial radio. Now they are getting a steep discount for their webcasting operations as well. The result is that artists’ income will flatline for the next five years while broadcasters profit at their expense. This ruling is a missed opportunity and falls far short of the hopes and expectations of SAG-AFTRA and its members. The union will continue to advocate for just compensation for artists.

SoundExchange:  SoundExchange presented a strong case on the fair market rate for music played by webcasters utilizing the statutory license. Our rate proposal used data from dozens of marketplace deals and was based on what willing buyers and sellers would agree to. Music has tremendous value and is the core foundation of the webcasting industry. It’s only fair that artists and record labels receive a market price when their music is used. We believe the rates set by the CRB do not reflect a market price for music and will erode the value of music in our economy. We will review the decision closely and consider all of our options. Additionally it is deeply disappointing to see that broadcasters are being given another unfair advantage. In their terrestrial business they do not pay a dime for the recordings they use and now this $17B industry will receive an additional huge subsidy on the music they use in webcasting. As music advocates, SoundExchange represents the entire recorded music industry and we remain united on the principle that recording artists and rights owners deserve a fair market rate when their music is used. SoundExchange appreciates the efforts of the CRB judges and staff throughout this process.