Do you remember the fanfare a few weeks ago when the iPhone 3G came out? That same day, Pandora founder Tim Westergren unveiled the Pandora for the iPhone application, and it has consistently been among the most downloaded iPhone apps. And Pandora overall has become among the most popular online music services (6.5 million users in mid May...ummm...mid May 2007!). Unfortunately, thanks to new music royalty fees introduced last year that charge Internet radio operators disproportionately higher fees than satellite or terrestrial radio companies, the nascent Internet radio industry--I'm speaking of smaller operators and start-ups--are at risk.
This whole brouhaha seemingly came to a head in the Spring and Summer of last year. Yours truly blogged about this quite a bit. I also repetitively wrote to congresspeople, senators, called them, etc., etc. Which brings us back to present day. Tim Westergren was recently quoted in an excellent Washington Post article citing that, due to the fact royalty charges are now eating up 70% of Pandora's revenues, and given that the SoundExchange folks have NOT been negotiating in good faith these past several months, he is seriously considering shuttering the Pandora service...and soon. This is a shame. I would have linked you straight to the Post article, but this ReadWriteWeb blog post and the many replies it generated (nearly 100 as I write this) are absolutely worth a read. It in turn will bring you to the aforementioned newspaper article.
Unfortunately I'm out of fight on this one at least for now. However, if YOU haven't done so already and you enjoy Pandora and/or similar services, I'd encourage you to contact your appropriate state representative. Instructions for exactly how to do so and the message to carry abound on the Web. Yes, there are far more pressing issues for us to deal with. But I'd like to think that free enterprise and entrepreneurialism rather than monopolistic business practices should be the order of the day in the music business. Sure, artists deserve to be fairly compensated, but Internet radio outlets also deserve equitable royalty assessments, don't you think?
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