Internet music source Pandora is highly successful. It claims 1M listeners and is said to be adding 40K new listeners daily via its tie to Apple’s iPhone. Even more importantly, it has managed to monetize its service, pulling in $25M annually. But with 70% of that going straight into copyright fees, its existence is threatened. According to the Washington Post, Pandora’s Tim Westergren has acknowledged the company is nearing the pull-the-plug point. It is likely that the problem is even more severe at less obviously successful web outlets.
According to the Post, Howard Berman (D-CA) has been trying to broker a last minute agreement between webcasters and SoundExchange, which collects royalty fees to redistribute to copyright owners, but its been no go. And the rates are actually set to become more oppressive in less than two years.
RBR/TVBR observation: We’ve heard talk on Capitol Hill that this is one reason there should be a performance royalty for radio. That’s just crazy. We see it as evidence that there should not be a royalty here, either. Especially here. If we were representing the best interests of artists, we’d want a deal in which webcasters present their listeners with a ready made opportunity to buy the music they like best – that’s where we’d make our money. Instead, it looks like they’d prefer to strangle the infant audio outlet in the crib and make losers out of all concerned.