Pandora buys a radio station. Why? | radioinfo

Pandora buys a radio station. Why?

hits1027_logo_274Here’s one to add to the head-scratching acquisitions in the technology industry. Music streaming service Pandora has purchased a radio station serving the fine people of Rapid City, South Dakota. All 70,000 of them.

Why have they bought CHR station KXMZ-FM which broadcasts as 'Hits 102.7'?

The background to the purchase has been a prolonged legal battle around the royalties that Pandora is required to pay as compared to terrestrial radio stations.

Owning an FM broadcaster now allows Pandora to be eligible for lower broadcast rates.

Pandora's Assistant General Counsel Chris Harrison has revealed that Pandora is filing a motion alleging "discriminatory treatment of Pandora and other internet radio companies by ASCAP". Pandora allege that this is due to it being offered access to music at higher fees and worse terms than to terrestrial broadcasters.

ASCAP have responded to the acquisition by accusing Pandora of attempting to underpay rights holders, saying: “Internet and traditional AM/FM radio services are very different businesses with different formats"

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