Music Royalties Could Kill Pandora
Source: Tom's Guide US | Keywords: royalties, music, pandora | Themes: The Internet, Business
Oakland (CA) - Escalating music royalties could put Internet darling, Pandora, out of business. In a recent interview with the Washington Post, Tim Westergren, the founder of the online radio station, says royalties could approach 70% of revenues and that the company is approaching its "last stand". Last year, the Copyright Royalty Board ruled that song royalties would increase from 8/100 of a cent per song per listener to 19/100 of a cent per song per listener in 2010.
Pandora is a free website that lets users create their own radio stations based on their favorite artists. It attracts an estimated 40,000 new customers a day and is a favorite amongst iPhone and other mobile phone users. Personally, I’ve been listening to Pandora for a few years and consider it to be one of the best attractions on the web today. There’s no messing around with crap music, just type in the artist you like and only their songs will be played.
SoundExchange collects royalties from on behalf of record labels and artists and US Congressmen are trying to mediate lower rates. Currently online radio stations are levied much higher royalties per song than traditional radio stations.
Pandora makes money with embedded ads from famous companies like Carls Junior and Don Julio. These ads bring in $25 million a year - not bad for web startup - but Westergren says future royalty payments would eat up $17 million of that take. Such a huge percentage could soon doom the company, a company that is approaching a "pull-the-plug" decision according to Westergren.
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Nooooooooooooo!!!!!! Don't Take Away My Pandora!!! :-(
That's a shame. Pandora is a great project and I will be sorry to see it go.
that stupid, because the music industry could figure out what people liek to listen to what type of bands, which could help attract new artists based on sounds. for instance, a lot of 311 fans, hate Red Hot Chillipeppers(cause everything sounds the same from them). Find out what other bands 311 fans like and figure out the commonalities between the bands/sounds and guess what, you've just created a money making next band.
Once again the greedy music companies are shooting themselves in the foot by getting rid of a possible great revenue stream because they want more money.
Gotta love the ol' recording industry. I think their mantra since 2000 has been to destroy any good thing anyone tries to do with music. For me, Pandora isn't just a great service, it provides interesting details on the songs, artists, and music. But of course the recording companies wouldn't want people to actually understand music, just suck up the crap they throw out.
From about 2002-2007, I hardly bought any new CDs. Wasn't pirating anything, just didn't hear anything worth getting. Then I started up an account on Pandora, and suddenly I heard stuff worth buying again. Pandora got me back into the CD aisles and stores after years of hiatus. I'm actually going out of my way to track down albums that don't make it to the shelves locally so I can pay money to have them.
I'm actually pretty proud of the fact that my music library is 100% legal. If it weren't for Pandora's services, I probably wouldn't have bought nearly as many CDs. The tactics of the music industry are just baffling to me: they seem to be pushing away the customers that are willing to pay for their product, and cutting down on services that might generate more interest and sales.
@WheelsOfConfusion
+1