SomaFM Founder: SoundExchange Wants Google to Buy Pandora

SoundExchange is only offering webcasters an 18-month reprieve from the minimum fees that would be required by impending online radio royalty rates because it secretly hopes that during that time, Pandora will be acquired by Google -- according to Rusty Hodge, founder of listener-supported SomaFM.

In an email sent to Listening Post, he wrote,

"The likely outcome that SoundExchange is hoping for is for Pandora to be acquired by Google in the next 18 months, since it will be hard for Google to say they can't afford the new, higher rates. (Shades of YouTube)."

Hodge also offers a clear summary of how the Internet Equality Act would even the playing field between satellite and internet radio (satellite stations pays 7.5% of revenue, while many internet radio services will pay fees that exceed their total revenue):

"The whole point of the Internet Radio Equality Act [link] is to fixthe broken system by which rates for internet broadcasters (only) areset now. The IREA mandates that the same process for setting rates forother digital services like satellite and cable music services be usedfor setting the rates for internet radio.

"Currently, satellite rates are set by judges using a 'fair marketvalue' formula, and judges are instructed to not adjust the royaltiesso much as to do harm to the industry.

"Internet radio rate settings are based on a 'willing buyer, willingseller' example, [which] doesn't work very well, since for each song (orartist) there is only one seller of that copyrighted material."