Pandora Fights Back Against ‘Internet Radio Discrimination’

Right now, Pandora looks like the king of internet radio. But founder Tim Westergren isn’t happy with his company’s status, and he’s getting political about it.

Pandora recently started running video and audio ads encouraging fans to contact their local congressmen/women and convince them to support the “Internet Radio Fairness Act”, a piece of legislation introduced last week by a bipartisan duo of representatives and Oregon’s Democratic Senator Ron Wyden.

What’s this all about? Well, record label royalties run the radio industry, and web-based companies often pay higher royalty rates than their cable and satellite counterparts like Sirius XM, etc. Despite signing a royalty agreement in 2009, Westergren feels like current rates are still too high, and he wants them to level out—which is exactly what they would do under the Fairness Act.

This is not an insignificant issue: Pandora lost $5.4 million last quarter despite $101.3 million in reported revenue.

Pandora’s PR Chief Eric Brown says that the “ads have already resulted in increased dialogue with congressional representatives” but adds that he’s not “sure if any new co-sponsors have signed on as a result of the marketing push.”

What do we think? Will these ads make a difference? How do we feel about legislation sponsored by a single company acting in its own best interests?

And why does Pandora pay higher rates in the first place?