Tuesday, June 11, 2013

Pandora Buys South Dakota Radio Station

In a move that shows just how out of whack the record industry is, Internet Radio powerhouse Pandora is purchasing Rapid City radio station KXMZ-FM in a move made strictly to give them lower royalty rates.
The company agreed to purchase KXMZ-FM, a Rapid City, S.D., terrestrial radio station. Its first foray into traditional radio broadcasting, the move has little to do with strategic shift and everything to do with royalty costs. 
Pandora pays two royalty streams, one for actual sound recordings and another to composers for publishing rights. The sound recording fees make up the lion's share of its content costs. But by buying a terrestrial station, Pandora piggybacks onto a settlement that gives better rates on that smaller fee stream.
Maybe a new revenue stream for Governor Daugaard to pursue? Credit cards and radio stations...

3 comments:

  1. Dang: if it would bring us more diversity on our airwaves, by all means, go for it! (But does anyone listen to radio anymore?)

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  2. Heck Cory you have all these streaming services paying higher rates for basically the same content as radio stations have, why not buy a relatively cheap station somewhere in Podunk, USA to save money. I doubt they really care much about providing diversity, just finding a station (they only need one) in the black or close to it that can give them better royalty rates.

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  3. Good Article, thank you

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