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Save Internet Radio: A Noose around Pandora’s Neck

Save Internet Radio: A Noose around Pandora’s Neck

Pandora’s founder, Tim Westergren, appealed for public support this week in response to the US Copyright Royalty Board’s decision for a whopping 140% escalation in internet radio royalty fees over the next four years, denouncing the decision in a letter that has rapidly snowballed on the web.


“The survival of Pandora and all of Internet radio is in jeopardy…” Westergren starts. “The new royalty rates are irrationally high, more than four times what satellite radio pays, and broadcast radio doesn’t pay these at all. Left unchanged, these new royalties will kill every internet radio site, including Pandora.”
Such news brings back a bitter taste from the days of ubiquitous filesharing and the mixed signals aired by a struggling record industry. Ironically, this sharp increase in rent may drive the small timers to operate illegally and the leaders, such as Pandora, to charge for something most of us won’t pay for anyway after having it so good for so long. Who wants another dose of the majors going after pirate radio? Boring.
I don’t believe the Copyright Royalty Board is asking whether [most”> artists are being compensated fairly for their work, nor do I believe that this decision addresses a gray area in tracking and reporting streaming media. I do believe, however, that the musician community at large would opt for coverage before higher royalty rates. The leverage college radio receives (as opposed to Top 40) should be considered for individuals and parties with certain services online. After all, if we don’t protect the little people – those who start a blog, host a podcast and generate content – we will be ‘surfing’ the dial from one Clear Channel to another.

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