Andre Yoskowitz
18 Aug 2008 15:44
According to Pandora founder Tim Westergren, the hugely popular web radio site is about to go offline, citing new pressures from the record labels that will double royalties paid to the copyright owners.
To put this situation in stunning clarity, Pandora has over 1 million listeners per day but three quarters of all revenue for 2008 will got to paying off royalty fees. A recent decision by a federal panel will make those fees even higher by next year. By 2010, Internet Radio royalty fees will be about 180 percent higher than those of satellite radio.
Westergren adds,“this is like a last stand for webcasting, we’re losing money as it is. The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we’re doing is wasting money.”
The decision was pushed by music licensing authority SoundExchange, which demanded more money for the labels without even seeing that Internet Radio stations have proven to be the most efficient ways of promoting music.
I cannot even tell you how many new artists or old artists I have found using Pandora. I liked some of these artists so much that I went to see them in concert, giving the money to the musicians. Without Pandora I probably would not have known they even existed.
If Pandora goes offline, then this really could be the death of Web Radio as the site is by far the largest available and the best.
Let us hope that SoundExchange can see through the greed and allow the royalty fees to be dropped to a reasonable amount. If not, they will soon have no Internet Radio sites to even receive royalties from.