Christopher Harrison, a senior lawyer and VP of Business Affairs at Pandora, resigned from the internet radio company last week, Fortune has learned. The news is significant because Harrison directed many of Pandora’s legal battles with the music industry, including the decision to purchase an FM radio station in South Dakota as part of an attempt to seek lower royalty rates.
Harrison’s departure also comes as competition among digital music services heat up, and as companies like Pandora (P) and Spotify serve as lightning rods for musicians frustrated with online royalty rates.
The company provided the following statement about Harrison’s departure, which occurred last Wednesday:
“Chris has been a valued team member, and we appreciate his many important contributions. We have a very strong team in place, and are confident our music licensing activities won’t skip a beat as we move ahead.”
Pandora has been on an upswing of late, posting quarterly earnings in July that beat analysts’ expectations and led to a boost in its share price. On a conference call related to those earnings, executives said the arrival of new competitors like Apple Music (AAPL) have not dented Pandora’s popularity. The company is also betting on connected cars, where it hopes to earn additional advertising and subscription revenue.
The royalty issue still looms large, however, as financial statements show the company is spending about 50 percent of its overall revenue on royalties. Currently, Pandora is awaiting the outcome of legal disputes over rates it must pay to collection service BMI, and of the Justice Department’s investigation into lifting long-standing court orders that require BMI and a similar service, ASCAP, to license songs to everyone at a fixed rate. The company also recently lost a court bid to parlay its 2013 purchase of the South Dakota FM station into lower royalties.
Meanwhile, Pandora – and Harrison in particular – have been the target of invective by certain musicians who accuse the company of paying too little per song. Such accusations often fail to acknowledge that the overall royalty rates paid by Pandora and other digital services are much higher than the rates paid by traditional AM/FM radio stations. Other musicians, however, are grateful to Pandora for providing tools like its AMP dashboard, which gives them an unprecedented ability to learn about the locations and demographics of their fans.
Harrison, who is moving to satellite radio provider SiriusXM (SIRI) according a source, did not respond to attempts to reach him by email and LinkedIn on Sunday.
