Letter to Lawmakers--Pandora Bill

Jonathan Carroll
November 26, 2012
The Honorable Mark Warner
United States Senate
475 Russell Senate Office Building
Washington, DC 20510‑4601
The Honorable Jim Webb
United States Senate
248 Russell Senate Office Building
Washington, DC 20510‑4604
The Honorable Frank R. Wolf
House of Representatives
241 Cannon House Office Building
Washington, DC 20515‑4610
Re: Oppose the "Pandora Bailout Bill"
I am a lifelong musician, artist and writer/composer and have had personal experience with the issues stated below which have direct import into the legislation in question below.

I have lobbied for fairness in the Broadcast Performance Royalty legislation, and, like all else like me, have been beat to the punch in your offices by the profoundly well-funded NAB, which preempted many of the efforts by front loading many inaccurate and misrepresenting scenarios, hoping to shift the focus --and culpability--from broadcasters to the labels themselves, even to the songwriters, who happen to have a much fairer deal historically, even citing only the most profoundly successful acts (a very small percentage even in the industry’s heyday) whose names are recognizable enough for them to be salient spokespersons for this cause, as greedy, spoiled and Pollyannaish.

Recently there have been deals made between some new labels (with already successful acts who are enjoying high sales and exposure via many new delivery systems, such as Pandora) which falsely cite "parity" as the end all justification for lower rates. In reality these lower rates HAVE NEVER been fair or justified. The new digital services, such as Pandora who launched in 2003 and formed, developed and tweaked its business model with a library supplied FOR FREE by label and non-label and artists alike, before starting to pay the MINIMAL fees only within the last few years.

These recent arrangements are unique deals by companies that can uniquely benefit from them as they have a large digital presence, not a template for universal extension to all broadcasters.

Since Napster woke the industry up in the 90's--too late, I might add---many within the industry have been scrambling to catch up since the new paradigm has been established, with all its ever-changing shifts and adjustments with the status quo. If you look at the % drop in music sales during the last 15 years, you will see the decimation of a once healthy and thriving music industry brought about by its tardy response to the digital revolution.

But please consider the fact we had just recently become encouraged that there could be a final legislative resolution for Broadcast Performance Royalties after a much much longer period of time
during which the United States enjoyed the dubious company of Qatar, North Korea, Rwanda and China as countries who HAVE NEVER paid fees for terrestrial broadcast performances.

I write to express my strong opposition to the so-called "Internet Radio Fairness Act" (H.R. 6480/S. 3609) and to ask you not to cosponsor the bill. If the bill comes up for a vote, I urge you to vote NO.

Pandora and broadcasters support this bill, claiming that fairness and parity are needed. But the bill ignores the greatest inequity in music compensation -- the lack of a performance right to compensate performers when their songs are played on terrestrial radio.

And the bill isn't fair to the creators of music whose work makes up the content of Internet radio. This bill would slash payments to artists by hundreds of millions of dollars. Under current law, artists and music creators receive from Pandora payments for the use of their performances based on a fair market, "willing buyer, willing seller" standard. Pandora's special interest bill would slash those payments to a below market, government-mandated subsidy rate. With the music business shrinking to half the size it was ten years ago, working class musicians wait for these royalty checks every quarter to help make ends meet.

Despite crying poor to Congress, Pandora is expected to clear more than $600 million in revenues next year, and is valued at more than $1.5 billion. This isn't about fairness, it's about lining stockholders' pockets. Musicians should not be deprived of the income that they deserve to subsidize Internet radio.

Congress shouldn't pick winners and losers on the Internet, and shouldn't force artists and music creators to pad Pandora's wallet.

Historically, recording artists have already the deck enedemically stacked against them.

This bill is a giveaway to Pandora and I urge you to oppose it.

Dear Senator Warner:
I am writing to express my strong opposition to the so‑called "Internet Radio Fairness Act" (H.R. 6480/S. 3609). I urge you  not to cosponsor this bill and to vote "NO" if the bill is brought up for a vote.
Although this bill claims to be about fairness, in reality it is nothing more than a bailout for Pandora to increase shareholder profits by taking money away from artists and music creators. Under the law, Pandora and other Internet radio services must pay a statutory royalty rate that represents the fair market value of the music they use to build their businesses. The "Internet Radio Fairness Act" would cut the royalty standard to a below market rate that amounts to a government‑mandated subsidy. Music creators will be paid less while corporate shareholders are paid more.
Pandora's estimated value is over $1.8 billion. It can afford to fairly compensate the hard‑working artists and professionals who make a living by creating music. Instead of providing another bailout for big business, Congress should provide real radio parity by requiring terrestrial broadcast radio to compensate music creators just as Internet, satellite and cable radio services do.
Please oppose the "Internet Radio Fairness Act." There's nothing fair about robbing music creators to pay for Pandora's profits.
Jonathan Carroll