Here's the deal: As Atkinson vaguely explains in her final few paragraphs, Pandora pays 93% of its content acquisition costs to
on a per-track basis as per the 2009 Webcaster Settlement (
See my explanation of compulsory versus direct licensing for some color
). This is the chunk of money the labels and Internet radio are fighting over in Congress right now.
Composition royalties/music publishing rights make up roughly 4% of Pandora's content acquisition expenses; this money goes to music publishers such as Sony/ATV.
So, the devil is in the details, buried by the
New York Post
. Using simple numbers -- if Atkinson's story is legit, that 4% portion of the pie will see the 25% increase, not the 93%, which is fixed through 2015.
As I write, P is down more than 2%. The damage was worse in the pre-market and at the open. Why? All because of a headline.
Shocking, but this is all too strangely similar to what went down in another Rupert Murdoch-owned publication,
The Wall Street Journal
earlier in the week regarding "weak demand" for Apple's (
) iPhone 5.
--Written by Rocco Pendola in Santa Monica, Calif.