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Are Pandora's Attackers Lying, Being Disingenuous or Just Plain Stupid?

Stocks in this article: P SIRI

You shake my hand, while you're pissing on my leg/I'm cutting you lose, I don't need this misery/Your soul is toxic, you ain't no friend of mine

--Social Distortion, "Far Behind"

NEW YORK ( TheStreet) -- So musicFIRST is out with its response to Pandora (P) co-founder Tim Westergren's Wednesday afternoon blog post where he issued a challenge:

The first falsehood being disseminated is that Pandora is seeking to reduce artist royalties by 85%. That is a lie manufactured by the RIAA and promoted by their hired guns to mislead and agitate the artist community. We have never, nor would we ever advocate such a thing. I challenge the RIAA to identify a statement from Pandora that says we seek to reduce royalties by 85%.

musicFIRST claims to have punkslapped Westergren on Twitter ...

... and at its Website with this unabashed beauty of disingenuous -- a statement Westergren made about the Internet Radio Fairness Act (IFRA):

"This bipartisan bill will correct the incredible inequity in how different digital radio formats are treated under the law when it comes to setting royalties. The difference is quite extraordinary. In 2011, Pandora paid over 50% of our revenues in performance royalties, while SiriusXM paidless (sic) than 10%. (actually 8%)."
50% to 8%.  About an 85% reduction.

How do we ever expect to get anything done? How can we fix the broken royalty systems the industry has had in place long before Pandora hit the scene? How can we bring the music industrial complex into the digital age (about a decade too late) with new tech- and data-driven platforms that address issues beyond royalties?

It might not be possible if this is the type of crap musicFIRST and its partners continue to pull.

Why didn't the group just take things a step further and claim Westergren wants artists to take a 100% performance royalty pay cut? I am sure they could have found something he said somewhere, sometime that Pandora pays XX percent of its revenue in royalties, but AM/FM radio pays nothing. 100% sounds so much better than 85%. If you're going to mislead people, go all the way. Don't hold back. It's not like musicFIRST hasn't made a laughingstock of its reputation as it is.

For the record, in the most recent quarter, Pandora's content obligation, across various types of royalties and agreements, adds up to just under 69.1% of revenue.

I have talked to Tim Westergren personally. Many times. On the phone. Over email. Face-to-face. I have asked him about this point blank. When he discusses how much Pandora pays in relation to Sirius XM (SIRI) or broadcast radio, he, quite clearly, is not saying he expects or wants Pandora to pay a performance royalty equal to 8% or ZERO percent of revenue. Not at all. He is just pointing out the glaring inequalities inherent in the current, outdated system.

Westergren didn't write IFRA. Neither did Pandora. musicFIRST can distort the situation all it wants. Its brand of misleading artists and the public borders on lying, however, that's the beauty of disingenuousness; you're never actually telling a complete untruth. You're playing just dumb enough -- taking everything at its most literal and brain dead face value -- to come off as righteous.

Boys, give the egos a rest, find some perspective and take actions that will actually benefit the musicians, particularly the independent artists the royalty system has always shortchanged, you claim to serve.

-- Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.

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