Tim Westergren, founder of Pandora Media, speaks during an interview in October 2015. Photographer: David Paul Morris/BloombergBloomberg / Getty Images
Internet radio services like Pandora will have to pay more to artists and their representative groups, according to a decision released today by the Copyright Royalty (CRB). The basic per-song rates paid by Pandora will go from $.0014 per song, or 14 cents per 100 songs played, to $.0017. That’s a nearly 20 percent increase.
The $.0017 rate will remain in effect for all of 2016 and then may increase according to the Consumer Price Index, a common measure of inflation, through 2020. At that point, the CRB will make another rate decision.
Today’s decision resolves a long legal fight in which Pandora was asking to pay a lower rate of $.0011. SoundExchange, which distributes money to record labels and artists, wanted the rate to nearly double to $.0025 per stream.
The decision applies to all Internet radio providers, of which Pandora is the largest. Its competitors like iHeartRadio will have to pay the same rate.
The CRB is a little-known three judge panel that makes decisions critical to the economics of Internet radio. Currently, Pandora pays a bit more than a tenth of a penny for each track that gets…