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Business News Digital Labels & Publishers
Will PRS rates cut allow Pandora UK?
By CMU Editorial | Published on Friday 29 May 2009
So, will songwriter collecting society PRS For Music slashing their digital royalty rates enable US-based streaming music service Pandora re-enter the UK market?
As previously reported, Pandora bosses shelved plans to launch a UK version of their service because of PRS’s rates, and subsequently had to block access to their American website to UK IP addresses in order to comply with licensing rules. Following the news on-demand streaming royalties were being cut from 0.22p per stream to 0.085p, some speculated this might enable Pandora to reconsider its UK ambitions.
However, that is looking unlikely. Mainly because Pandora wouldn’t operate under the on-demand stream licence, because it is, of course, one of those services that sits between traditional online radio stations and Spotify-style on-demand jukeboxes – its has elements of personalisation and recommendation, but is not truly on-demand, you can’t just show up and ask to listen to the new Green Day single, or Eminem album, or BNP leader Nick Griffin’s ‘West Wind’ collection of nationalist songs. You set the player in motion by naming your favourite artist, and then it plays you a stream of music. There’s the facility to skip tracks, but not full on-demand functionality.
That kind of service sits under PRS’s cheaper ‘interactive webcaster’ licence, which, while also cut as part of the collecting society’s online licensing revamp, is only reduced by 23.5%, not the dramatic 61.4% cut that we saw in the on-demand streaming rate.
Pandora CEO Joe Kennedy doesn’t sound too optimistic about the new webcasting rates and the chances of them enabling Pandora to launch in the UK. He told Digital Music News: “PRS is apparently attempting to characterise the changes made to webcasting rates as similar to those made for on-demand, which I don’t believe is an accurate characterization”.
You might wonder why Pandora doesn’t just develop a Spotify type offer, which would presumably be more popular with users and advertisers that its current model, though, of course, while the difference between interactive webcasting and on-demand stream PRS royalty rates is now less, the latter is still more expensive. Plus that’s before you consider what the record companies would want to licence their music for a truly on-demand service. The labels have always been more sensitive about the impact of truly on-demand streaming music services on a la carte download sales, and many rumours abound about the premium rates Spotify have agreed to pay the majors in order to get their buy in for their especially user-friendly very on-demand streaming music service.
