ArtsWatch: Pandora Goes Terrestrial

In a bold and tricky move, Pandora becomes Rapid City's latest radio station owner
June 17, 2013 -- 7:29 am PDT
By Philip Merrill / GRAMMY.com

In recent news ...

Pandora Buys Broadcast Tower In South Dakota
On June 11 Pandora Assistant General Counsel Christopher Harrison wrote an op-ed in The Hill titled "Why Pandora Bought An FM Radio Station." Given Pandora's legislative track record and its 2012 lawsuit against ASCAP, a quick first guess might be lower royalty rates, which would be correct. ASCAP President Paul Williams responded on June 12, encouraging members to use the Twitter hashtag #PandoraExploitsCreators. "Pandora is trying every trick in the book to brazenly and unconscionably underpay and take advantage of the creative labor that produces the core offering of their business — music written by individual songwriters and composers." The terrestrial radio station that Pandora bought is KXMZ-FM Hits 102.7 broadcasting from Rapid City, S. D. Besides trying to leverage station ownership to achieve "licensing parity" with different music distribution models, Harrison's op-ed was upbeat, looking forward to the opportunity to engage with Rapid City's 42,000 existing Pandora users. Reacting negatively, National Music Publishers' Association President and CEO David Israelite said, "Make no mistake, Pandora is at war with songwriters. ... They are ... pursuing lawsuits and gimmicks." On June 13 BMI sued Pandora in federal court over the implications of the terrestrial station purchase.

Apple To Launch iTunes Radio Streaming In Fall
Apple previewed iTunes Radio at its Worldwide Developers Conference in San Francisco on June 10 and described the streaming service's engaging features in a press release. Integrated into the media player for iOS7, iTunes Radio will be free and ad-supported, with the exception of iTunes Match subscribers, whose service will be ad free. Its recommendation engine evaluates prior purchases, accepts search terms (but not to play specific songs), accepts feedback on individual tracks, and incorporates album artwork. Apple's Senior Vice President of Internet Software and Services Eddy Cue said, "It's the music you love most and the music you're going to love, and you can easily buy it from the iTunes Store with just one click." In a blog post, RIAA CEO Cary Sherman wrote, "Music, more than ever, is driving online commerce and conversation. ... It's clear that there's plenty of consumer demand for all sorts of platforms — the 'lean forward' model where the fan picks exactly what he or she wants to the 'lean back' model where a playlist or particular genre of music is served up to the user. And permutations or hybrids of each, such as what Apple is now offering." With major labels and publishers on board and still plenty of lead time for indie labels to sign up, iTunes Radio is set to provide the crowded music streaming marketplace welcomed competition.

New Studies On Mobile Adoption And Millennials
On June 10 Pew Research Center's Internet & American Life Project revealed that tablet ownership has nearly doubled from 18 percent in 2012 to 34 percent today. Tablets are especially popular with adults ages 35–44, college graduates and those with an annual income of more than $75,000. The study followed shortly behind Pew's June 5 report on smart phone ownership, finding that 56 percent of Americans now own a smart phone. While smart phone use is higher for those earning more than $75,000 annually, it is consistently high for younger adults, especially those ages 18–29. Separately, on June 5 Viacom released key findings from a January MTV survey of music fans ages 15–29, the Millennial demographic. The majority of these consumers believe music should be free and artists should be "constantly accessible, especially on social media, offering unique and intimate moments to their fans." Feeling close to an artist makes these fans more likely to support them by purchasing their music, with 28 percent having done so in the previous month. In some good news, 85 percent of Millennials agree that it is "cooler to listen to a diverse range of music versus one genre."

Industrial Software Pirate Receives 12-Year Prison Sentence
After pleading guilty in January to pirating $100 million in industrial software through operation of the Internet site Crack 99, on June 11 Chinese national Xiang Li was sentenced to 12 years in prison. The U.S. Immigration and Customs Enforcement investigation revealed Li was just a middle man for an international ring of software crackers. Li was previously reported to have made $60,000 in revenue from his illegal sales.

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