Sony/ATV Negotiates Higher Royalty Rate From Pandora

Sony/ATV has negotiated a 25 percent increase in the royalty rate it receives from Pandora, according to the New York Post. The deal will last 12 months. This is a coup for songwriters and publishers who have been paid nominal fees for song performances on non-interactive streaming services, such as Pandora.
It has been widely reported that as of 2013, Sony/ATV is no longer using ASCAP and BMI to collect digital performance royalties. This change allows the publishing giant to negotiate rates directly with Pandora and similar services.
Payments to songwriters and publishers for online performances have been a hot topic in recent months. In November 2012, NSAI Executive Director Bart Herbison and songwriter/NSAI President Lee Miller explained the situation to MusicRow. Giving a specific example of the low payments received by songwriters, Miller explained that five hit songs collectively received 33 million spins on internet radio during the third quarter of 2012, and the songwriters were collectively paid $500 in royalties.
Herbison said, “[Songwriters and publishers] get paid from a share of the ad revenue that is on the free part of Pandora [and there aren’t many ads].”
According to Pandora’s 2012 annual report, it paid 49.7% of its revenue in royalties to SoundExchange, which pays labels and artists, and 4.1% of its revenue in royalties to the US PROs, which in turn pay songwriters and publishers.