Pandora (P) Pays Over 600% More in Royalties vs. Sirius (SIRI); Seeking to Change Structure
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Heading for a testimony in front of Congress Wednesday, Pandora (NYSE: P) founder and strategy chief Tim Westergren is looking to relieve a chip on his shoulder.
According to the NY Post, Westergren thinks Pandora is doling out way too much of its top-line in royalties. Says Westergren, "It’s a bizarre lack of parity that’s grown up over time."
Currently, Pandora is said to pay out about half its revenue to artists and recording labels. This compares with the 7.5 percent payout made by Sirius XM (Nasdaq: SIRI) in 2011, an 85 percent discount. Further, traditional broadcasters don't pay such fees.
Pandora -- which draws the lions share of its revenue from advertisements to 125 million registered users -- is looking for Congress to set a standard on Internet radio broadcasting. The standard would also apply to peers Spotify and Grooveshark, amongst others, as well.
According to the NY Post, Westergren thinks Pandora is doling out way too much of its top-line in royalties. Says Westergren, "It’s a bizarre lack of parity that’s grown up over time."
Currently, Pandora is said to pay out about half its revenue to artists and recording labels. This compares with the 7.5 percent payout made by Sirius XM (Nasdaq: SIRI) in 2011, an 85 percent discount. Further, traditional broadcasters don't pay such fees.
Pandora -- which draws the lions share of its revenue from advertisements to 125 million registered users -- is looking for Congress to set a standard on Internet radio broadcasting. The standard would also apply to peers Spotify and Grooveshark, amongst others, as well.
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