In a possible game-changer over how musicians are compensated for use of their music online, Billy Joel, Rihanna and Missy Elliot are set to fight the online music company Pandora Media Inc over royalties. The company is in the process of lobbying for U.S. Congress to pass the "Internet Radio Fairness Act," which would change regulation of how royalties are paid, though many of the artists themselves oppose it.
A group of 125 musicians, including Rihanna, Billy Joel and company, argue the bill would cut the amount of money an artist receives when one of their songs is played over the internet by a whopping 85 per cent. "Why is the company asking Congress once again to step in and gut the royalties that thousands of musicians rely upon? That's not fair and that's not how partners work together," read the open letter, to be published this weekend in Billboard. The issue of how Pandora - an advertising-driven online music company - pays musicians for streaming their songs has been hotly debated and a similar argument concerns Spotify in the UK and Europe. Pandora's founder and chief strategy officer said in a statement, "Internet radio and the artists whose music is played and listened to on the Internet are indeed all in this together.A sustainable Internet radio industry will benefit all artists, big and small." Essentially, the most customers Pandora attracts, the more money it has to pay overall for rights to stream music. The company perceives this to be "astonishingly unfair" to internet radio, saying on its website, "We are asking for our listeners' support to help end the discrimination against internet radio. It's time for Congress to stop picking winners, level the playing field and establish a technology-neutral standard."
According to Reuters, Pandora closed 4.6 per cent lower at $7.31 on the New York Stock Exchange on Wednesday (November 14, 2012).