Read the Fine Print? Pandora Cries Foul on PRS

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Is PRS for Music really easing the playing field for digital music players in Britain?

On-demand sites – including YouTube – now face significantly lowered per-stream charges for performances, part of a realigned structure introduced this week.  Pure-play webcasters will also experience similar shifts, including per-stream drops, though the per-stream reductions are less pronounced.

But not everyone gets a break, and results will vary.  Essentially, both on-demand providers like YouTube and webcasters are being given a choice: Either pay a higher percentage of revenues, or the aggregate of lowered per-stream charges, whichever is highest.  Sounds logical, and better for revenue-challenged startups, though it remains unclear if the numbers will make sense for everyone.

Affected companies are now running the numbers.  YouTube has yet to comment, and will continue its negotiations in private.  But Pandora, an interactive music service that also faces similar revenue and per-stream movements, is already crying foul.

Part of the problem, according to Pandora CEO Joe Kennedy, is that per-stream reductions for webcasters – interactive or non-interactive – are far less substantial than those for on-demand providers.  On-demand providers are getting a 61.4 percent reduction on per-stream rates, while pure-play webcasters get a 9.1 percent drop.

Interactive webcasters like Pandora get a 23.5 percent chop, and everyone faces higher revenue percentage requirements.  “I think the key is that PRS is apparently attempting to characterize the changes made to webcasting rates as similar to those made for on-demand, which I don’t believe is an accurate characterization,” Kennedy told Digital Music News.

Then, another issues crops up.  PRS for Music is setting rates for performances of underlying compositions, to be paid out to songwriters, composers, and publishers.  That says nothing about recorded music rights, administered through the PPL.