CEA, Pandora, and more add their support for Internet Radio Fairness Act

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Issue Date: 
Sep 21 2012 - 11:25am

From Issue:

Groups representing the consumer technology industry and major online media companies, as well as Internet radio's largest webcaster, have now publicly supported the Internet Radio Fairness Act, introduced to both houses of Congress today by Reps. Jason Chaffetz (R-UT) and  Jared Polis (D-CO) and Sen. Ron Wyden (D-OR).

Michael Petricone, senior vice president of government and regulatory affairs, Consumer Electronics Association (CEA): "Under today’s outdated rules, Internet radio providers are forced to pay a significantly larger percentage of royalties than their competitors," commented CEA SVP/Government and Regulatory Affairs Michael Petricone. "This irrational and unfair royalty system hinders investment and innovation in Internet radio. The changes proposed by the Internet Radio Fairness Act are simple and long overdue... We urge the House and Senate to pass the Internet Radio Fairness Act as quickly as possible."

The CEA represents two-thousand consumer technology companies and produces the International CES, the world's largest consumer technology tradeshow.

In Pandora's statement supporting the bills, company founder and Chief Strategy Officer Tim Westergren said, "Royalty rates for different formats of digital radio are astonishingly unequal... Last year, Pandora paid roughly 50% of its total revenue to royalties, more than six times the percentage paid by SiriusXM." He added, "A more equitable rate structure would drive investment and innovation, bringing greater choice for consumers, and ultimately greater revenue for performing artists."

Pandora remains the far-and-away leading webcaster in Internet radio, with nearly 1.3 million "Average Active Sessions" in the U.S. only (M-Su 6a-12M), according to Triton Digital Webcast Metrics (here). This is seven times that of the nearest competitor, Clear Channel, and represents listening growth of 89% so far in 2012.

CCIA (the Computer & Communications Industry Association) counts Google, Microsoft, Yahoo!, Ebay, and Pandora among its members.

CCIA President/CEO Ed Black said, "Charging different rates for different digital radio providers is fundamentally unfair and goes against the interests of an economy that has time and again chosen to boost competition and innovation." VP Matt Schruers added, "This legislation would update the law to no longer discourage competition since technology has enabled different distribution methods for radio offerings."

Representing larger webcasters, online media, digital services, and technology innovators, DiMA (Digital Media Association) members include Amazon, Apple, Live365, Real/Rhapsody, Slacker, YouTube, and more.

DiMA Executive Director Lee Knife said today, "The 801(b) standard has been widely used for nearly half of a century; and it’s worth pointing out that those who complain about applying the 801(b) standard to Internet Radio today have conspicuously never complained about the application of that very standard by the CRB when setting the rates to be paid for their mechanical licenses."

Broadcast groups like Clear Channel and Salem Broadcasting are also reportedly in support of the bill, and several others are expected to issue statements to that effect. 

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