Here's the deal: As Atkinson vaguely explains in her final few paragraphs, Pandora pays 93% of its content acquisition costs to SoundExchange 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 (AAPL) iPhone 5. Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV