Pandora Shares Surge after Gov’t Reveals Royalty Rates
Shares of Internet Radio provider Pandora Media surged on Thursday after the US Copyright Royalty Board raised royalty rates by 21.4 percent. The move will increase costs for the ad-supported streaming service, and rival companies. Currently, streaming providers pay 14 cents per 100 plays of an artists music. Wednesday’s move bumped that up to 17 cents per 100 spins, and goes into effect at midnight on New Years Day, 2016. Pandora shares were up as much as 20 percent in after-hours trading Wednesday night, then surged higher than that Thursday, before settling back around 13-plus percent higher for the day. Pandora praised the board’s decision, even though they had requested a drop to 11 cents per hundred streams. The new rates will be in effect for five years, through December 31st, 2020.