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Pandora cofounder Tim Westergren says it’s unfair that other types of radio pay lower royalties, especially since internet radio is stuck with the highest rate of all.  In fact, that’s the basis for the parity-seeking Internet Radio Fairness Act on Capitol Hill.  But what if everyone should be paying more – not less?

That’s the completely different take from musician advocate Ray Hair, head of the American Federation of Musicians, who feels that Pandora is really

fighting to screw musicians, not establish platform parity.  “Westergren is absolutely correct that it’s unfair that Pandora pays artists while AM/FM radio doesn’t; but that disparity doesn’t mean that everyone should pay artists less,” Hair recently expressed in an op-ed for The Hill.  “And Westergren’s claim that Pandora cannot afford to pay artists fairly doesn’t add up either. The company just completed a wildly profitable IPO, has an explosive user base, maintains one of the world’s most-recognizable music brands, and remains the industry leader.”

Which means, by Hair’s estimations, Pandora can afford it.  “Westergren suggests that artists would actually earn more if internet radio stations paid them less, because there would be more internet radio stations,” Hair continues.

“To me, it sounds more like a clever way for Pandora to make billions in profits by cheating artists out of their fair share of the internet radio revenue pie.   Excuse me for being cynical about that kind of thing – it’s a tough business.”

But wait: Pandora isn’t profitable and never has been, and Wall Street is beating shares down.  And despite serious user gains, there remain serious questions related to long-term profitability and survival.  Then again, Hair noted that the space is still growing, there are more streaming radio services entering.  “Paying royalties to musicians isn’t stopping new internet companies from entering the market, as Westergren argues. The internet radio market has grown 33 percent over the past five years.”

All of which raises the question: just because Pandora is struggling with its business model, does that mean musicians should struggle as well?

“Even internet radio stations like Pandora pay musicians a small fraction of a penny per performance. That’s the miniscule price to support the musicians that give life to the songs we love, and bring joy to the world. Paying musicians isn’t an inconvenience to radio’s business model – it’s an essential part of it.”

[Digital Music News]