Pandora, Other Internet Radio Stations May Survive After All

Assuming negotiations succeed, you’ll have your Pandora to listen to after all. On Tuesday, Congress passed the Webcaster Settlement Act, which gives Internet radio stations like Pandora until February 2009 to reach a new royalty agreement with copyright holders; if they meet the deadline, the government will not interfere, which is great news since it was the gov’s Copyright Royalty Board (CRB) that set the current market-killing fees in the first place.

From PC Magazine:

Pandora founder Tim Westergren…pointed out that Pandora would, under the CRB rules, have to hand over $18 million of its expected $25 million 2008 revenue to cover royalty fees—a price that could force the company out of business.

There are still two more hurdles. First, the President has to sign the bill, but it’s widely expected he will. Second, Internet radio stations and copyright holders have to actually negotiate an agreement that both sides feel is fair, and that won’t price webcasters out of business. But at least now there’s hope that one of the web’s most beloved music sites will keep streaming.

“Pandora saved” [SFGate]
(Photo: Bill in Ash Vegas)

Comments

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  1. punkrawka says:

    Umm… what happened to capitalism in this country? Why was the government fixing a price between two private parties to begin with?

    • @punkrawka: IIRC, the copyright holders submitted a deliberately high royalty request to the CRB, which is part of the Library of Congress, with the expectation that the CRB would then listen to counter-arguments and adjust the rate down to a more realistic number. Instead, they approved the request without any changes.

      I’m not sure if that means the music companies tried to game the CRB and got burned, or if that means the three judges who make up the CRB were caught revealing their support of the music companies (as well as their lack of insight on how online business models work). Or, if webcasters just failed to present a cogent counterargument when the high rates were first presented.

      Wherever the problem originated, it’s now a clusterf*ck. Hopefully normal market sense will prevail.

  2. VA_White says:

    Yay! I love Pandora. She’s serving me up some delicious Bob Marley right now.

  3. Jazz Hands!!!!!!!

  4. BrianDaBrain says:

    One of these days, the music industry as a whole is going to realize that increasing royalty fees (along with suing customers) is not a really good way to continue doing business. The more they shut down places like Pandora, the more folks are going to turn to pirating to get the music they want without paying outrageous fees to do so.

    • Tiber says:

      @BrianDaBrain: Will this be before or after all the people of the world put down their weapons and realize that we’re not so different after all, ushering in a new era of peace?

  5. BrianDaBrain says:

    Thanks for the cute kitten, Chris. Making my day already.

  6. stacye says:

    HORAAYYYYYYYYY!!!!! I ♥ Pandora. I’m not really sure why the copyright holders would have such a problem with a service like Pandora. I have more artist CDs on my Amazon wishlist (which I purchase from frequently) because of this service.

    • VA_White says:

      @stacye: I’m with you. There is a ton of music on my iPod that I bought from Amazon MP3 because I heard it on my Pandora station. I never would have even heard of some of these artists otherwise.

  7. katbur2 says:

    I love Pandora and am thrilled to hear this. I’d probably pay a little for it (don’t tell them) but it works out for artists. I’m 41 and buy new music because of Pandora. In the last year Ozomatli, Vampire Weekend, Tea Leaf Green, JJ Cale y’all got my cash because of Pandora!

  8. HogwartsAlum says:

    I listen to a station that plays soundtracks. I don’t know how all that works but a while back they made it so we couldn’t request an artist if they were already in the queue, because of concerns about ripping albums. People would request in “trains” so almost a whole album would play. It was great but now we can’t do that.

    So if you like, say, Ennio Moriccone, and he’s in the queue and it’s an hour long, you have to wait an hour to listen to him again, even if it’s not the same album.

  9. dry-roasted-peanuts says:

    Invisible Butt Seks.

  10. econobiker says:

    Anyone remember an internet radio service that was named something like moon rahpsody or moon beam or similar that went under around 2002?

  11. Triborough says:

    They should have just tacked this one onto the pork filled bailout.

  12. swintronix says:

    Pandora has turned me on to many great bands I’d have otherwise never heard of. I’ve bought about 6 CDs form bands I’ve heard on Pandora, and added at least that many to my Amazon wish list. Pandora and sites like it are a great thing for the music industry and the economy.