Why Pandora turns to old school radio
Pandora has bought South Dakota radio station KXMZ-FM in an attempt to lower its fees.
June 18th, 2013
03:42 PM ET

Why Pandora turns to old school radio

By Jonathan Binder, CNN

Follow on Twitter: @jbinder

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(CNN) – Pandora Radio is a pioneer in putting music online. Pandora allows people to pull up endless music on their computers and take it on the go with a smart phone.

So why are they investing in a small South Dakota radio?

The internet radio giant claims it is paying too much in music licensing fees from companies like ASCAP and BMI. Not only did Pandora file suite against ASCAP, the company bought KXMZ in South Dakota because of a loophole. Companies with terrestrial radio pay less in licensing fees.

Glenn Peoples, Senior Editorial analyst at Billboard magazine, helps sum up their case:

[1:03] "Pandora's argument is that is that they shouldn't be penalized just because they are a stand alone internet radio service. They want the ASCAP fees that are available to stations that are a part of this radio music license  committee settlement."

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