Pandora Responds To Pink Floyd Over Royalty Dispute, Says Band Has Been 'Misled'

Pandora (NYSE:P) has responded to an op-ed piece penned by the surviving members of Pink Floyd, who claimed that the music-streaming service supports a bill in Congress that would dramatically cut artist royalty rates for Internet radio.

In an open letter published by Business Insider, Pandora said the band had been deceived by the Recording Industry Association of America, which is mounting a well-organized campaign to fight the bill by deliberately spreading false information. The letter specifically refutes a claim made by Pink Floyd, which states that Pandora supports an 85 percent royalty cut for artists.

Nothing could be further from the truth, Pandora writes. The music streaming service says it supports any solution that would benefit Internet radio while not reducing artist royalty rates.

“We have enormous respect for the members of Pink Floyd, and their amazing artistic contributions,” the statement reads. “We also respect the genuineness of their opinion. Unfortunately, they have been given badly misleading information – the result of a well-orchestrated campaign by the RIAA and their lobbying arm to mislead and agitate artists. A glaring example is the assertion that Pandora supports an '85 percent artist pay cut.' That is simply not true. We never, nor would we ever, support such a thing. In fact, Pandora has suggested solutions that would guarantee no reduction in artist payouts while also nurturing the growth of Internet radio -- a medium that is crucial to thousands of independent musicians who don’t enjoy major label support or FM radio exposure.”

“This much is true: Pandora is by far the highest-paying form of radio in the world and proudly pays both songwriters and performers,” the letter continues. “For perspective, to reach the exact same audience, Pandora currently pays over 4.5 times more in total royalties than broadcast radio for the same song. In fact, at only 7 percent of U.S. radio listening, Pandora pays more in performance royalties than any other form of radio.”

While Pandora’s response is certainly compelling, the musicFIRST Coalition notes that the 85 percent figure stems from the difference between royalties for Internet radio (50 percent of revenue) and satellite radio (8 percent of revenue). The Internet Radio Fairness Act, which Pandora supports, is seeking this reduction.

MusicFIRST also points out that Pandora’s response fails to address the underlying concern that Pandora recently distributed a “letter of support” for Internet radio without going into specifics about what musicians were being asked to sign.

In a blog on The Trichordist, musician David Lowery, founder of alternative rockers Camper Van Beethoven and the band Cracker, said he was paid all of $16.89 by Pandora last quarter for 1,159,000 plays of his song, “Low,” which is less than what he makes from the sale of a single T-shirt.

As the Internet Radio Fairness Act will likely be reintroduced in the next session of Congress, this recent spat between Pandora and high-profile artists will no doubt factor into the minds of lawmakers before a final decision is reached.