Music streaming service Pandora has halted its lobbying effort for the Internet Radio Freedom Act, which would have lowered the royalty rates that the service uses to determine how much to pay artists. Pandora, by virtue of being an online service, pays a royalty rate of 4 percent, which is about double what traditional broadcasters might owe.
The company's founder Tim Westergren said that, for the time being, the company is not pushing for the bill to become law:
“We are pragmatic and recognize the low probability that Congress will address this issue in the near term,” he said, thanking the members who supported the bill “for their continuing efforts to ensure a vibrant and thriving music industry.”
The bill was prominently opposed by a number of famous acts, including Rihanna, Katy Perry, and Beach Boys leader Brian Wilson, who said that it would cut payment to artists unfairly. A large number of independent publishers also opposed the bill.
In the meantime, though congressional action has been dropped, the service will continue lobbying the Copyright Royalties Board, which sets the statutory rates for websites like Pandora, Spotify, and Rdio. As explained by GigaOM:
For Pandora, the failure of the Internet Radio Fairness Act could place it in a tough spot when its locked-in licensing rates from the major record labels expire in 2015. It must either obtain rates from the Copyright Board, which has set high rates in the past, or negotiate directly with the labels, who aren’t necessarily fond of Pandora.