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Comment by earbitscom | Hacker News Reader

Actually, that's not very accurate. Those performance royalties are paid to SoundExchange, a non-profit assigned to distribute the royalties to the artists. The whole reason the labels hate Pandora is because it's the only massive service paying hundreds of millions of dollars directly to the performers, without filtering it through the labels' accounting departments.

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That's correct, Pandora pays SoundExchange the statutory Interactive Streaming rate for the sound recording rights. SoundExchange in turn pays the appropriate rights holder. This might be an artist, directly, but often it's a record label. The labels don't like the revenue flowing through SoundExhange because the process is transparent to their artists. Which means they can't hide the money.

Pandora also pays the publishers for the performance right, separately from SoundExchange. This can be a fixed percentage of revenue. Societies like ASCAP, BMI, and SESAC generally administer the rights on behalf of the publishers.

Lastly, Pandora also pays Harry Fox Agency the statutory rate for the mechanical rights. HFA in turn pays the song writers.

Here's a good breakdown from an old and entertaining (view comments) TuneCore blog post: http://blog.tunecore.com/2012/03/the-additional-10-5-spotify...

Does Pandora have to pay mechanical rights to Harry Fox Agency? I thought that only applied to downloads (non-streaming).

Pandora pays for mechanical rights, but it's a lower rate than Spotify pays, for instance.

Check out TuneCore's Music Industry Survival Guide. It's a useful resource.

http://www.tunecore.com/guides/sixrights

Edit: I'm wrong (and so is Tunecore). Parent is partially correct, Pandora does not pay for mechanical rights. They qualify as a PurePlay Webcaster. However, Interactive Streaming services, such as Spotify, do have to pay mechanicals in addition to recording and performance.

Technically it's non-interactive streaming, hence no on demand play, restrictions on how many times an artist is played and the skipping restrictions.

Yes, you're 100% right. Typo. Too late to correct. Should read, "Pandora pays SoundExchange the statutory Non-Interactive Streaming rate for the sound recording rights."

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