Five of the world's most successful songwriters performed on Capitol Hill to protest against Pandora and the Internet Radio Fairness Act (IRFA) last Wednesday.
Pandora, which had 60 million listeners over the last month, wants to reduce the revenue it pays musicians and claims it will help them maintain their business, according to Rolling Stone
, who wrote Christina Aguilera
", said from the stage: "Pandora wants to make money more money - off the thing we created
The IRFA bill pits Pandora against the music business. On one side, Pandora says it is "barely hanging on", but the musicians say they deserve a fairer share of the royalties and that Pandora should re-work its business model if it can't sustain itself.
7% of US radio listening is done on Pandora, and it has paid artists $250 million so far this year. That's more than half its revenue, compared to the 7.5% that satellite radio stations pay and 15% that cable TV music channels pay.
"This is real money flowing to the artists, and we love that it's meaningful. I believe, if totally unfettered, Internet radio would totally replace FM
," said Pandora's Joseph Kennedy
/ "There's truly a win for everyone for artists, for innovators who develop great digital services and for the listening public if we can get this right
But the five songwriters who performed in the live protest said their songs had been streamed on Pandora 33 million times between January and March this year, and were paid only $600.
It's a tough call - musicians are losing out on traditional sales and need new forms of revenue. But if Pandora is being truthful, it could collapse under the costs of supporting the complex infrastructure that enables internet radio.
Who would you side with? Let us know in the comments.