New House Bill on Royalty Rates Could Pad the Pockets of Pandora (P) Shareholders
Tweet Send to a Friend
Down)
Pandora (NYSE: P) might just get a much-needed boost, should a new bill introduced in the House last Friday take hold.
The bill -- the Internet Radio Fairness Act -- is aiming to transition royalty rates paid by Internet radio providers to artists and labels from a "willing buyer, willing seller" model to that of a more standardized form, similar to what Sirius XM (Nasdaq: SIRI) enjoys. Followers of the stock believe that the switch would provide more favorable rates for Pandora.
Under the bill, a panel of federal judges would evaluate the value of the music and the effect of royalty rates on the music industry. Clearly, labels and artists are against this move, thinking that current rates are fair and musicians should be rewarded for their efforts.
So, how much of a difference could it make? Currently, Pandora pays a fraction of a cent for each song listen to on its service and is required to pay a minimum of 25 percent of its revs in royalty fees each year. Reuters noted that Pandora shelled-out roughly half its revenue to labels and artists. By comparison, Sirius paid out just 8 percent of its total take in royalties.
The bill -- introduced by Jason Chaffetz, Republican of Utah, and Jared Polis, Democrat of Colorado -- will be deliberated further after November elections.
Shares of Pandora are up 5.2 percent Monday. The stock has traded flat over the last several months, maintaining a range of $9.50 to $11.50 or so. Shares have peaked-out at $15.98 in the last year and many investors would like to see Pandora get back to -- and above -- that level.
For more Pandora news, including monthly metrics, click here.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
The bill -- the Internet Radio Fairness Act -- is aiming to transition royalty rates paid by Internet radio providers to artists and labels from a "willing buyer, willing seller" model to that of a more standardized form, similar to what Sirius XM (Nasdaq: SIRI) enjoys. Followers of the stock believe that the switch would provide more favorable rates for Pandora.
Under the bill, a panel of federal judges would evaluate the value of the music and the effect of royalty rates on the music industry. Clearly, labels and artists are against this move, thinking that current rates are fair and musicians should be rewarded for their efforts.
So, how much of a difference could it make? Currently, Pandora pays a fraction of a cent for each song listen to on its service and is required to pay a minimum of 25 percent of its revs in royalty fees each year. Reuters noted that Pandora shelled-out roughly half its revenue to labels and artists. By comparison, Sirius paid out just 8 percent of its total take in royalties.
The bill -- introduced by Jason Chaffetz, Republican of Utah, and Jared Polis, Democrat of Colorado -- will be deliberated further after November elections.
Shares of Pandora are up 5.2 percent Monday. The stock has traded flat over the last several months, maintaining a range of $9.50 to $11.50 or so. Shares have peaked-out at $15.98 in the last year and many investors would like to see Pandora get back to -- and above -- that level.
For more Pandora news, including monthly metrics, click here.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- Pandora (P) Gets Even More Social with New Facebook (FB) Timeline App
- Sony (SNE) is Early Winner in Battle of Video Game Giants (MSFT)
- Trading Radar for 05/22: Salesforce.com (CRM), GameStop (GME), Heinz (HNZ), Gap (GPS),
Create E-mail Alert Related Categories
Insiders' Blog
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
