Billy Joel, Rihanna Fight Pandora Over Compensation Regulations, 125 Popular Musicians Sign Letter Opposing 'Internet Radio Fairness Act'

A total of 125 musicians, including Billy Joel, Rihanna, and Missy Elliot, are fighting the popular music streaming site Pandora Radio over potential compensation changes. In an open letter addressed to Pandora Media Inc., such well-known musicians (who claim to be fans of the online music company) stress their opposition to the "Internet Radio Fairness Act." Pandora is currently lobbying Congress to pass the new bill, which many musicians argue will "cut by 85 percent the amount of money an artist receives when his or her songs are played over the Internet."

Pandora is currently lobbying lawmakers in U.S. Congress to pass the "Internet Radio Fairness Act," which would change regulation of how royalties are paid to artists. Pandora and a number of other popular music services, including Clear Channel Communications, are in support of the bill because different music streaming outlet providers, such as satellite and cable, pay different rates.

"The current law penalizes new media and is astonishingly unfair to Internet radio. We are asking for our listeners' support to help end the discrimination against internet radio. It's time for Congress to stop picking winners, level the playing field and establish a technology-neutral standard," Pandora stated on its website.

Pandora is largely funded by advertising, and as of October the company's total share of U.S. radio listening rose from 4 percent to approximately 7 percent. However, the more listeners Pandora gains, the more money the internet music streaming company must pay for rights to stream such music (a rate currently set until 2015).

The MusicFirst Coalition and SoundExchange, two organizations that agree with musicians' opposition to the passing of the "Internet Radio Fairness Act," received an advanced copy of the letter on Wednesday (Nov. 14). A segment of the letter states, "Why is the company asking Congress once again to step in and gut the royalties that thousands of musicians rely upon? That's not fair and that's not how partners work together." The letter in its entirely will be published in Billboard magazine this weekend.

MusicFirst also released this statement on its website:

"Tell Congress: Don't Slash Music Creators' Pay: We need you to write Congress now and tell them to SAY NO TO SLASHING MUSIC CREATORS' PAY. The truth is that Pandora's dishonest proposal would be devastating to music creators.  And, while Pandora's misleading campaign claims that Pandora is suffering under the current, fair system of compensation, nothing could be further from the truth.  Pandora is expected to clear $600 million in revenues next year under the current system, and has seen year to year revenue growth that would be the envy of many businesses and families in this time of slow economic growth."

Pandora has yet to comment about the letter.

The "Internet Radio Fairness Act" is a bipartisan bill sponsored by U.S. representatives Jason Chaffetz and Jared Polis and Sen. Ron Wyden.