There's been a lot of movement in the streaming music services field lately. With the announcement of the new iTunes Radio from Apple, other streaming services can't afford to mess things up. Not that Apple is already poised to take over the scene, but Apple will definitely bring some tough competition.
So the news that Pandora is fighting with artists isn't a great way to fend off the massive company that is Apple. According to some music industry artists, Pandora is fighting a number of lawsuits in addition to struggling with artists that no longer want to be part of the streaming service.
Pandora's Big Purchase
Pandora recently purchased a radio station in South Dakota. The company made the purchase in order to take a stance against the music industry. Why fight with the industry? Pandora's stance is that streaming music services have to pay a lot more in royalties and other fees than regular broadcast radio stations do. By purchasing a radio station, Pandora was trying to make a strong point - but that's not how the music industry sees things.
David Israelite, CEO of the National Music Publishers Association (NMPA), made an angry statement at a recent industry meeting. Israelite accused Pandora of trying to 'sneak in the back door,' and avoid paying artist fees. He also went on to state that "Pandora is at war with the music industry." Uh-Oh, Pandora, this doesn't sound good.
Pushing to Pass Bills
Pandora is fighting the music industry on a legal level too. Last year, the company backed a federal bill that would lower royalty rates broadcasters are expected to dish out. However, this bill did not go anywhere - but Pandora isn't giving up. The company will (presumably) be backing additional bills to lower the rates that streaming services have to pay.
For obvious reasons, the music industry is starting to form a collective against Pandora stating that the company has padded pockets deep enough to pay top rate royalties. This might be one of the reasons why Apple has decided to step into the music scene right now, too. However, Apple is having a hard time making royalty deals as well, which is why the company's streaming service isn't up and running quite yet.
Should Streaming Services Pay More?
Pandora did, indeed, make a good deal of money when the company went public. But, does that mean that Pandora should have to pay more than broadcast radio stations? I'm not so sure that the logic of "you make more money, so you should pay more" need apply to business matters. Then again, there are always two sides to every coin.
It will be interesting to see what kind of deal Apple is able to make with the music industry at large. If Apple pays the same, or less, in royalties in Pandora, this may give the company an upper hand. Then again, Apple and Pandora might join forces to make sure that the the music industry doesn't try to take advantage of streaming companies that can afford to pay more than regular broadcasters.