The bipartisan Internet Radio Fairness Act aims to change Internet radio royalty laws. Currently, some digital radio services, like Sirius XM, pay 80 percent lower royalties than others, like Pandora. The law seeks to change this discrepancy.
The new model proposes that Internet royalty rates be measured similarly to those for other forms of radio. Some estimate that if the law passes, Pandora’s stock could rise from its current $11 to over $28.
“Even terrestrial broadcasters support the measure,” notes Slate. “Powerhouses like Clear Channel stream their stations over the Internet these days, so pay higher fees to musicians and other copyright holders for distribution over the Web than over the airwaves.”
But the bill’s passing is not a foregone conclusion, and Slate cautions that entertainers and their powerful lobbyists will fight the legislation.
“MusicFirst, a coalition of labels and artists, also wants to level the playing field, but by raising royalty rates for other services, not shrinking them for the likes of Pandora,” explains the post. “Nevertheless, with a plan now on the congressional playlist, there’s greater option value to Pandora’s income streaming.”
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