US NEWS: Royalty fees could make Pandora extinct
US legislation governing the royalty payments required from internet broadcasters could signal the end of one of the USA's most popular web radio services.
Pandora, which has around a million listeners daily, is one of the top 10 iPhone applications Stateside and is attracting 40,000 new customers a day. But it's on the brink of pulling the plugs, simply because new legislation means the station could end up paying record companies about $17m (around £9.3m) a year, which would be 70% of its projected revenue.
Last year the US Copyright Royalty Board decided to increase the fee to play a recording on web radio should increase from 0.08c to 0.19c per song per listener. By contrast, conventional radio stations pay nothing in performance royalties, and satellite radio stations about 6-7% of revenue.
The situation for web stations like Pandora is made worse by the fact that, rather than playing one song at a time, as conventional radio stations do, the web station's technology allows listeners to create their own radio station, so hundreds of thousands of songs could be streaming simultaneously.
The station's Music Genome Project can automatically create playlists based on listener's initial choices, thus tailoring the output to each user's tastes.
It's expected the Copyright Royalty Board's decision could have have even greater financial impact on smaller stations, some of which could find themselves facing bills amounting to twice or three times their revenue.
Comments
Yes this has been looming for a while. We have some problems possibly looming in the UK too. The only thing I dont get about the American system is that it's not a level playing field technologically. We have to remmber that USA is very much a vested interest country (we are slowly becoming one too). If the man with the biggest, fatest purse says I want this to happen then it happens! It's a bit like the media only they twist the arm of the law makers.
Make no bones about it, this will fail in the long run and they are simply stupid to try to play this game. Napster went Corporate but many others took its place. So one way or another the water will flow. It simply can not be stopped. If not the consumer, the artists themselves who have the savvy will simply see it as an opportunity. The more people who hear their music the more will come to their shows and possibly download their tracks etc. The model will simply change. Greedy people will end up with nothing at all. Mind you it will pass the established music industry by, but why should we care? Give you an idea; when I spent some of my early wrking time in the music industry they used to call me 'affectionately'the straight. Why? Cuz I was the only on there who wasnt wasted on drugs! Pop will eat itself when it gets the munchies!
Complete tossers!!!!!
Another way of shutting down a method for the music listener to get their sounds.
You just have to ask yourself why!
Do they not realise that if someone hears a tune there is a good chance they will buy it, be it by download or hard copy.
This way they reduce the potential size of the audience that they could reach, thus potentially robbing themselves and the artist of sales.
I listen to di.fm and they are in the same boat.
Could this be another step towards "renting music" you only can listen to it as long as you subscribe!
When will the industry stop persecuting genuine music lovers/fans with this sort of rubbish!
Perhaps, if we all stuck together and bought nothing from them, for a period of time to hit them where it hurts, – financially.
Maybe then we as consumer will have the upper hand again instead of being dictated to and the companies will be happy with our business again.