Rihanna’s battle Against Lower Music Royalties of Pandora – SIRI, CCMO, AAPL

Pandora, the internet music services, requested for congress help in lowering down the royalties it pays to their musicians.
Rihanna, holding 63 million Facebook fans, a hot 24 years age old singing young superstar   strictly opposed Pandora bid of cutting musicians royalties.

Pandora says it’s difficult to survive in the part of a U.S music company in profitability view point as it has to pay more for the performers.

All other performers joined hands together in this fight. They start rejecting further reduction in their royalties and discounted rates as well.

CC Media Holdings Inc (PINK:CCMO)’s Clear Channel Media and Entertainment, forcing the law of the country to pass an Internet Radio Fairness Act, scheduled for a Nov. 28 hearing before the U.S. House Judiciary Committee.

Performance Royalties:

Like all other radio service Pandora is paying a fraction of a penny as artist fees as the royalties of each song they performed. While Sirius XM Radio Inc (NASDAQ:SIRI) is now paying a fixed percentage of revenue earned for this.
In Oakland, for the quarter ended July 31, Pandora noticed a lost of 3 cents a share total amounting to $5.4 million. All its goodwill failed down. Now its advertisement cost has increased to 88% of its revenue.
Digital Music:

U.S royalties are only 8% of its revenue while for Sirius XM Radio Inc (NASDAQ:SIRI), its got 87 percent of its sales from subscriptions.

The news, that Pandora is pushing Congress for lowering down the musician’s fee came to the listener in many other ways. Pandora suffers a lot. Its name and fame in the market is now in danger zone. The music company has come recently to the digital market and curtailing musician’s fees, which is very unethical and unlawful as per Rihanna and the other artists.

They wrote many things against the music company  published as an advertisement in Billboard magazine.

According to Tim Westergren, Pandora’s founder and chief strategy officer, said in a Nov. 14 e-mail. A sustainable radio industries can give its artists all benefits which can only be possible by the implementation of the proposed law.

In June 2011 Pandora found itself at a share price of $16 which is down by 50% on Nov of $7.84.

In Sept. 21, Jason Chaffetz, a Utah Republican, and Jared Polis, a Colorado Democrat. Ron Wyden, an Oregon Democrat, introduced the bill in the Senate about the Pandora’s proposal.

By that time, Pandora used and the communication media such as e-mails, advertisements and a website to contact members of Congress in support of the legislation.

‘Bluff Called’

It’s difficult for the company now to manage the competitors like a potential streaming-radio service from Apple Inc. (NASDAQ: AAPL).

Music FIRST which represents the recording industries of America opposed the proposed legislation as it reduces Pandora’s royalty rate below the fair market rate.

The NAACP and AFL-CIO also oppose the legislation.

The whole crowd of artist opposing Pandora-backed bill has gone for broad appeal saying that its Unfair and lobbing bluff.

Share value of  the followings:

Sirius XM Radio Inc (NASDAQ:SIRI) fell by 2.17% to close at $2.70.
CC Media Holdings Inc (PINK:CCMO) fell by 1.27% to close at $3.10.
Apple Inc. (NASDAQ:AAPL) fell by 0.81% to close at $584.78.

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Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.