Say Goodbye To Pandora?

When SoundExchange, the organization that represents many labels and artists, proposed steep new royalty rates for radio webcasters last year, they shortsightedly killed off their own revenue stream. Instead of their proposed rates being cut back as part of a standard negotiation, they were surprised to see the U.S. Copyright Royalty Board reject opposing arguments and adopt SoundExchange’s rates fully. Now Pandora, the popular streaming music site, says it’s paying over 70% of its revenue in royalties, and unless Washington changes the rates soon—which looks unlikely— they will have to shut down.

“We’re losing money as it is,” founder Tim Westergren’s told The Washington Post. “The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we’re doing is wasting money,” adding, “We’re funded by venture capital. They’re not going to chase a company whose business model has been broken. So if it doesn’t feel like its headed towards a solution, we’re done.”

So where can you get your Pandora-like fix in the future? There’s Nutsie, which streams a rough facsimile of your own music library to your phone, but when we tried it a year ago it was Symbian-friendly (albeit buggy) and now it seems to just run on Blackberry devices. If you’ve got the patience to upload all your music to the fee-based backup service, you can access your backed-up library from a PC (as well as several other types of devices) and stream the songs, but only files in mp3 format (no aac streaming for you!). There’s always, a great recommendation service (I like it better than Pandora, actually) which now has the deep pockets of CBS to support it and seems to be working on a subscription model it will introduce sometime in the future. Or finally, SimplifyMedia offers a free application that will let you share your iTunes library across the web to other computers, your iPhone, and up to 30 friends. (NB:the iPhone version of the app costs money.)

“Pandora Could Be First Major Casualty of New Royalty Rates” [Wired]


Edit Your Comment

  1. admiral_stabbin says:

    This is a damned shame. What else are we going to do with all these tubes and dump trucks?

  2. Nayrlladnar says:

    That’s a damn shame.

  3. gmoney says:

    What is it about the recording industry that makes all of them so completely delusional and unreasonable? The RIAA still remains convinced that they can sue their way to having people start buying CDs like they used to do. Boggles the mind.

  4. Nayrlladnar says:

    hmm…great minds and all that.

  5. CMU_Bueller says:

    It takes some work as you have to search for what you want, but you can find and listen to almost anything.

  6. AskCars says:

    Why don’t they just charge for an upgraded version of their iPhone app?! It’s easily one of the best things you can do with the iPhone.

  7. xwildebeestx says:

    Honestly, what purpose do the major record companies serve anymore? If I want to hear a “hit” song by some “major” artist, I have radio and TV commercials. If I want to hear something by a smaller band that doesn’t owe its entire existence to a slick marketing campaign and a team of NASA engineers crafting everything from their songs to the shoes they wear, I can get it directly from that band. If you ask me, this is yet another death rattle coming from the mainstream music marketers. The situation that caused these types of things to happen in the first place will be completely irrelevant in a few years.

  8. crabbyman6 says:

    I knew it was only a matter of time until somehow they would be forced to pay ridiculous royalties and would have to shut down. The recording industry seems to follow this pattern: see a new revenue stream, watch stream for success quietly, jack royalties for new stream, if successful, so it shuts down or gives up on them, whine about how illegal downloading is killing the recording industry and then repeat. If the stream isn’t successful they just sue them or shut them down immediately. Sounds like a sound business model to me :/

  9. friendlynerd says:

    The sound quality isn’t super, but you can play anything for free and without a subscritpion at

  10. Quilt says:

    The only thing the recording industry really has to offer anymore is promotional might, and they’ll only bother to promote the “artists” that they can sell quickly and cross promote.

    Since that leaves out the majority of artists, I’m waiting for the day when the vast majority are self producing over the internet.

  11. Impius says:

    *Sigh* I used to DJ for an online radio station until this move by SoundExchange killed the station. Those were some of the best times I’ve had on the internet. Sadly now it looks like SoundExchange is claiming another of my favorite things on the internet. The station I worked for made a little money from banner adds and the such on the page but no where near the money to actually pull in a profit from running the station, and from what I understand that’s the same way most internet radio stations are/were. Where does SoundExchange expect these stations to come up with the money for the insane amount of money they are wanting the stations to pay?

  12. ScramDiggyBooBoo says:

    I think the RIAA and all these other organizations need to realize that the CD and all other media is dead. I understand the need to make money (for themselves, not the artists silly!) but this is getting ridiculous. Why don’t they find a happy medium where the two industries can co-exist? Music and Movies are going completely medialess and they need to get that through their thick money hungry skulls! I dont want my own music, because Pandora brings fresh, random content to my PC that i like. I have been using it for about a year now, and EVERY song that it plays, whether i’ve heard it or not, I like! I dont wanna here the same songs OVER AND OVER as i would with my library! Pandora, I love you and your cause was worth it! I like the service so much that i would even be willing to pay X amount of dollars a month/year to use it (wink wink). There is no gate keeper (RIAA) with the music industry. The gates have been busted wide open since Napster and Audiogalaxy. Ugggghhhh!!!

  13. opsomath says:

    Good thing we have price controls to keep SoundExchange from exploiting people!

    Oh, wait, it’s having the exact opposite effect as intended. Gee, I guess we’ll have to get the government to intervene somehow…

  14. Milo.Stone says:

    The worst part about this is that radio is advertisement for music. I think that if they want to impose these licensing fees against an organization that promotes their music for free, they should do it against terrestrial radio as well. Just because it’s the internet doesn’t make it special.

  15. Trai_Dep says:

    It’s quite amazing. In the last two-odd decades, the recording industry has completely destroyed two highly optimized, free promotion and marketing/A&R channels that anyone else in any other industry would slay for. First, free radio, now internet radio.
    They aren’t people slaying the golden goose, they’re Golden Goose Serial Killers.

    Well played, sir, well played. Advantage: BitTorrent!

  16. Quilt says:

    The recording industry has taken up the 3 step business model of:

    1. Destroy the blooming internet radio station industry.
    2. …
    3. Profit!

  17. novelgirl says:

    The thing that kills me here, is I discovered a lot of cool music on Pandora that I never heard on the radio. As a result I bought several CDs and MP3s of those artists.
    Talk about short sighted. It seems like who this will hurt the most is smaller artists or artists on small/ Indy labels.

  18. – use the Autoplay feature, and it’s very similar to Pandora. For now.

  19. LucyInTheSky says:


    i adore pandora! i cannot live without it!

  20. Mayor McRib says:

    Sadly the recording industry is shooting themselves in the foot…again. I use Pandora to stream artists that are similar to other artists that I like. When I find something I will go BUY music from the artist that Pandora introduced me too. Hint to the industry executives. If you have a great artist on your label and nobody hears them, you are probably not going to make much money on them.

  21. TheSpatulaOfLove says:

    And then they scratch their heads as to why people pirate and stop buying CDs.

    RIAA -1 / PirateBay +1

  22. Mayor McRib says:

    Guess I will just stick to listening to 30 second clips of songs over and over again on iTunes like Micheal Scott?

  23. Krycek says:

    I’m a co-host of an internet talk show based on the paranormal and when we come back from breaks we come back with some music. Does anybody know if we are going to have to pay royalties for this as well?

  24. katylostherart says:

    @Mayor McRib: bingo. it’s not like you can listen to the radio and get new music. i switch that on every six months when i forget my ipod and i hear the SAME SONGS that were playing a year ago.

    good job record industry, i now won’t purchase anything i can’t hear for free so i can hear it again. i will just borrow cds from the library and friends. people like free samples. how is this hard to comprehend? take the hint from ice cream stores, give us a free spoonful, we buy a cup. it’s not like you can even press rewind with pandora and play the same song more than once. in this day and age, most people won’t shell out money to buy a cd from an artist they’ve never heard before. they’ll just go back to stealing.

    you fail at business.

  25. TideGuy says:

    The App just quit working on my iPhone. Officially gone for good?

  26. digitalhen says:

    @Mayor McRib: i’ve *bought* at least 30 albums as a result of hearing the tracks on Pandora. are these guys idiots or what?

  27. Platypi {Redacted} says: is a good alternative as well. I actually kind of prefer it! With the rates they are paying, I would not be surprised to see Slacker follow this out.

  28. TideGuy says:

    False alarm, WiFi was down

  29. Geekybiker says:

    Just wait as all internet radio moves off shore.

  30. LoriLynn says:

    @novelgirl: exactly! They even had a link to the artist and the album information. It was a clear marketing tool for unknown or little known bands and a great way for us to hear new stuff. They weren’t playing enough Justin Timberlake or Miley Cyrus, that was the problem for the big record execs.

  31. wilstanton says:

    I use Pandora at work where we don’t get radio reception, and where I’m not keen on bringing my i-pod. I’m leaving the company soon, hopefully Pandora will last that long.

    ….(pours Mountain Dew on carpet) for a fallen hommie.

  32. ScarletsWalk says:

    Just have to echo some of the other posters. I was introduced to some artists through pandora and legally purchased their music. A lot of music, in fact.

  33. bikeoid says:

    @MongoLikeCandy : +1 on GrooveShark – , while it lasts…

  34. Turanga_Leela says:

    Productivity at my office is going to fall sharply if this happens. We all listen to it, all the time.

    God, the RIAA and its ilk are dumb.

  35. sillymeganlee says:

    This is so ridiculous. Like most posters here, Pandora helps me discover bands I never knew existed. Then I go out and buy their albums, tshirts, etc.

  36. noisebar says: sucks for people like me who listen to a huge variety of music. Its player also sucks. As somebody already mentioned, there is grooveshark. But I have no idea how long it’s going to last. I’m actually surprised that it hasn’t been shut down already.

  37. Drowner says:

    Poop. My music tastes are stale & depressing. I need Pandora!

    Had I of known large corporations would just kill it off anyway, I’d of just stolen all the music I loved from Pandora instead of buying it from ITunes.

  38. Nogard13 says:


    “Just wait as all internet radio moves off shore.”

    My thoughts exactly. What would happen if an Internet radio station decided to set up shop in Grand Caiman? They could profit all they’d want off the music and make a killing with banner adds.

  39. BigFoot_Pete says:

    This is part of the reason I will never understand the music industry. I can’t count the number of digital tracks and CDs I have purchased because I heard an artist on Pandora that I didn’t know and specifically went to search them out. I can credit Pandora with not only many of my own purchases, but some of my friends who, after hearing my new music, got it for themselves.

    As a pirate site has said much better than I ever could: “Why am I paying for something that is more inconvenient, harder to obtain, and limits how I enjoy it?”

  40. jeffs3rd says:

    My wife and I love Pandora. It will be sad to see them go. Just over the weekend I purchased 20 songs off of iTunes of artists I had hear on Pandora. And I rarely purchase new music. It’s shown me alot of artists I would have never heard of before but now enjoy . . . and purchase!

    RIAA: My gun just went off and my foot hurts. What gives?

  41. captainpicard says:


    The R(MAF)IAA would then get legislation passed that any consumer who goes to those offshore sites will get fined 3k for each song they listen too.

  42. BuddhaLite says:

    I like Pandora but Deezer is just so much better and since it’s located in France so there’s no RIAA bullshit.


  43. GamblesAC2 says:

    @Krycek: yeah… infact i think its kinda always been that way for pubic performance of a copyrighted song.

  44. johnfrombrooklyn says:

    How did Pandora ever expect to make money? I love it too but it seems to me that it follows a radio model but without the annoying advertising that pays for the music. Internet advertising just doesn’t pay as well as other mediums. It’s a bummer for sure.

  45. rellog says:

    @wilstanton: I use pandora in my classroom. I can set it to play music that is acceptable with regards to content and style. I really enjoy it. I guess I can set up some playlists, but I really enjoy the mix I get from Pandora.
    I hate the RIAA, and have refused to buy a CD or DVD for years (ok, the OCCASIONAL DVD that I feel warrants the price) I never download pirated material… but that doesn’t mean I’m not up to date with my CDs and DVDs… :)

  46. OneMHz says:

    The one thing I pined for after I got an iPhone was a way to listen to Pandora on it. They just came out with that and now this… I didn’t think they could strip anymore of my enjoyment out of music. All of the local radio stations are very corporate and only play the safe stuff (aka the 10 songs they tell us are really good/popular). I haven’t bought much new music because I refuse to buy anything until the lawsuits stop. And now they’re killing off one of the last avenues I had to find new, interesting music. I know there are other services out there, so I guess I’ll have to start looking for one I like again.

    Who’s got email addresses for an EECB? I know they don’t read it, but I’d be satisfied just to make it difficult for them to get their usual email.

  47. Kierst_thara says:

    Well, that’s sucky. I had to stop using Pandora quite a while ago, once they figured out that my ip wasn’t in the US, (stupid cross-border licencing issues; my page views are just as good as anyone else’s), but I really enjoyed the service while I had it.

    Like everyone’s said, it’s a great way to get exposed to new music that you’ll have a much better chance of actually liking, rather than the shotgun approach of most radio stations. And another thing I liked was that it just ran out of your browser; no software install required.

  48. Dillenger69 says:

    I better get the names of all the bands I’ve bookmarked on Pandora so I’ll know who to torrent when they shut down and I can’t listen any more.

    Yes, this move won’t help the industry. It will just move us back to pirate land.

  49. BrianDaBrain says:

    Wow, this is just bad. One of these days, the “music industry” (read: RIAA and its ilk) and will realize that they are running on a primitive business model, and that killing these compaines with bold new ideas for getting more music to the masses is not the way to make money in the long term.

    Another recommendation for all you Pandora users is Slacker. Very cool, very quick customizable radio. Hopefully they won’t be shut down by this same BS.


  50. WEGGLES90 says: is…

    well. Was great.

    The software works well. Still provides great reccomendations and all that jazz. But the new site update is lame. Trying to be “Facebook with music” but it’s not. I don’t know anyone who uses for socializing.

  51. Krycek says:


    I wasn’t sure if we needed to do that since we are doing it for no money and we’re just playing the beginning of the song and talking over most of what we play. I guess it’ll just be indy bands that enjoy the exposure from this point forward

  52. SabyneWired says:

    @Mayor McRib: The RIAA and its ilk have shot themselves in the foot so many times in the past 20 or so years that I’m amazed they would even have feet left to shoot. Idiots. Way to screw yourselves out of even more money.

  53. Darkwing_Duck says:

    @WEGGLES90: Know what you mean. I don’t really have many friends (on lastfm that is), and hear about new artists from other sources so I mostly just ignore recommendations on lastfm. I really only use it for personal reasons, I’ve always seen it as a good app where I can track my own personal music listening habits-nothing more, nothing less.

  54. captadam says:

    In Pandora, I once typed in Eels and found Wilco, which was my first time hearing them. Since then, I’ve purchased CDs (!) by Wilco, Golden Smog, Sun Volt, and Uncle Tupelo. One Pandora search = many purchases! It’s good for business!

  55. utensil42 says:

    @GamblesAC2: “pubic performance of a copyrighted song” eh? Man, I’d like to see that.

  56. Mayor McRib says:

    Make sure you pick up the Mermaid Avenue album with Billy Bragg. I guarantee you won’t regret it.

  57. My new year’s resolution this year was to change my piracy habits… specifically to pirate as much as possible and to never pay for zeroes and ones (music/movies), in response to the always-trying-to-outdo-itself bunch of douchebags that calls itself the recording and film industry.

    So far it is going pretty well. I haven’t bought even one CD or a single track on iTunes. Last month I was able to strip the DRM off all my past iTunes purchases so now I don’t have any DRM’d content whatsoever, which is nice.

    I just recently got into Pandora though since it’s free and I needed some new music for a change, so lately I haven’t been pirating as much. I guess they are trying to make it even easier for me to be 100% “underground” with my music listening, and make sure not only that they never see another dime of my money, but also never see a dime in revenue because of me (these royalties that they’re so anxious to not get after they finish killing internet radio.

    Way to go assholes!

  58. DwightDarnisha says:

    just wanted to clarify that nuTsie offers a superb web experience – not just
    limited to mobile devices.

    Check out the “serendipity slider” for great recommendations and some superb
    playlists such as Rolling Stone Top 500, 100 Greatest Lists in tons of

  59. Pandora is free. I use it. I have never spent money with Pandora. 70% of the zero revenues is what sum of money?

  60. @Rabbi Dave: There’s a fair paint to be made that it doesn’t mean the royalties are unjust solely because Pandora can’t pay the royalties. Perhaps they could do more to raise revenue.

    Like, for example, including some sort of advertising at all in the iPhone app. It costs Pandora something in royalties to stream every song I listen to a song with it, and as far as I can tell they’re just donating the music to me.

    When music is cheap, it’s easy to run the company with a “subscribers now, revenue later” model. But at some point that has to change.

  61. ZoeSchizzel says:

    I adore Pandora and have purchased many CDs becuase of the artists I’ve been introduced to through Pandora. I never would have heard them otherwise. I don’t listen to the radio, other than public radio. I wouldn’t mind paying a monthly fee to have Pandora. I wonder if they’re thinking about implementing a payment tier system? Pay XX a month for unlimited listening, XX a month for X number of hours. It seems a shame that the only option is free or nothing.

  62. quirkyrachel says:

    Nooooo. I listen to Pandora at work! :( Plus it’s totally introduced me to new artists.

  63. axiomatic says:

    Stop buying and listening to the RIAA’s product. I did ages ago and still listen to plenty of music. is a good starting point people.

  64. AtWhatCost says:

    Remember, not all bands on Pandora are RIAA, and don’t use that as a justification for just pirating their music.
    Also, Pandora does sort of have a fairly unrealistic business model. With so many people being able to listen to so many different songs at the same time, how do they expect to cover all the royalties off of a few ads?
    Something needs to be done about this, perhaps a blanket license or a set % of profits gets distributed to artists in relation to their plays? I hate to think of seeing Pandora go, but I would like to see small artists get paid something if Pandora is going to have ad revenue.

  65. Nick1693 says:

    I’ve always used (and enjoyed), it seems to be where I listen to most of my music.

  66. Nick1693 says:

    I’ve always loved using imeem .com

  67. Nick1693 says:

    @Nick1693: Oops! Sorry for the triple post.

  68. yagisencho says:

    Easily 25 of my past 30 CD purchases are directly attributable to’s service introducing me to new artists.

    The Copyright Royalty Board needs to take its collective head out of its ass.

  69. SexierThanJesus says:

    @Corporate-Shill: Ad revenue.

  70. Joafu says:

    This is unbelievable! Pandora is amazing and the only reason why I actually bought any CDs this year. When they go I’ll save money I suppose. The stupidity of these organizations never ceases to amaze me. Do they have monkeys running the show now?

  71. Saboth says:

    A shame. I found new artists on Pandora and purchased new music on Itunes for the first time in years. Now…well guess I will save even more money on music. I suppose music companies thinks advertising and new “pop” music acts will garner my interest? Not a chance in hell.

  72. UnnamedUser says:

    Many presume that the entertainment industry made a pricing error that killed off the online music streaming business.

    Consider, if you will, the idea killing off online streaming was the goal of the entertainment industry.

    IMHO, the music industry wants to control how you buy music, when you listen to it and on what medium you listen. Pandora and the like did not fit that business model, so they priced it such that they killed it off.


  73. drjayphd says:

    @UnnamedUser: Yeah, but surely the recording industry couldn’t be that short-sigh–oh. Right. Guess discovering new artists is anti-American or something.

    @Joafu: No, just James Hetfield, as depicted in the “Napster Bad” cartoons. Gotta keep moving those $100 Metallica cock rings, ya know…

  74. Keter says:

    @UnnamedUser: Agreed. And we as consumers need to adopt the same strategy. Let’s kill off the music industry mafia by identifying anything that will put a cent in their pockets and not buying it, and put our money into directly supporting good local bands and independents. Unfortunately, some very good musicians may be hurt by this, but that’s what lawyers are for: suing to get out of contracts…

  75. forgotten_dreamer says:

    Just at a glance I see two problems here that led to this:
    1) The recording industries measure success solely in CD’s sold instead of potential audience reached.
    2) Pandora Radio, while really fantastic in FINDING new bands that match my taste in music, is no help in BUYING that new music.
    Pandora is allready paying for itself w/ banner ads, why not have links to ITunes/ that lead directly to where I can purchase the music that I’m listening to? It seems like that would be ideal ad space for the sites that sell the music, and maybe the stats on “This many people that use the free content go buy stuff afterwords” would be what the recording industry needs to realize just how bad they’re screwing themselves by shutting down stations like this. Just my 3.4 cents (adjusted for 70% royalties).

  76. Voiceoftreason80 says:

    BULLS@T!!!!!! I use Pandora everyday at work. Its a damn shame. What artists are really losing money because of programs like this? A lot of the music I listen to on a daily basis are indie bands that I never heard of before. This isnt going to help the industry, just make it harder for new artist to get their music out there.

  77. varro says:

    @gmoney: There’s a mountain of cocaine that record industry execs need to purchase, and between P2P networks and the overall shitty quality of commercial music, the execs are mighty jonesin’…

  78. morganlh85 says:

    sigh. nothing can replace pandora.

  79. ne0shell says:

    So let me gets this straight.
    I bought all this DRM loaded music on iTunes and my iTunes application will allow me to share my library on my home network and to my apple TV -but- hold the iPhone, NOT to my iPhone over the interweb??? Did I miss the black suited RIAA vampire/lawyer sneaking up behind me?

  80. @ne0shell: That’s where SimplifyMedia comes in.

  81. Kajj says:

    @forgotten_dreamer: What? Clicking on any song in Pandora brings up links to both iTunes and Amazon and has for as long as I’ve used the site.

  82. Dyscord says:

    I hate this. The music industry’s greed knows no bounds. It all boils down to “Hey, we make money off of this, but lets make more. If people complain, we can say that it’s for the artist’s benefit”, never mind the fact that the artists rarely see any of the damn money in the first place.

  83. 11hawkinst says:

    @forgotten_dreamer: yeah seriously man, have you ever used Pandora? If you bookmark a song, it has both the Amazon and iTunes link.

    Ever since I got my iPhone and the Pandora app, I have been listening to it non-stop where I’ve bought at least 30 tracks from Amazon/iTunes in the past month.

    Instead of complaining, isn’t there something that we can do? I don’t want to sit back and watch Pandora die.

  84. @SexierThanJesus:

    Great. Ad revenue. I never buy anything to generate a click revenue stream. I don’t view ads, and if I did accidentally view an ad there is zero hope that I would buy the item because of a 200 pixel size blinkie light.

    See the problem with Pandora’s business model? Guess what, there are hundreds, thousands more like me.

    The best hope for Pandora would be receive payolla kickbacks for featuring certain songs. Ooops, somebody already tried that one and got caught.

  85. yagisencho says:

    Oops, forgot to plug this:


    My congressman (Jay Inslee) rocks.

  86. suburb says:

    @Chris Walters: As far as I know, Simplify is free on the AppStore, too. I got it for free and its listed as free right, so I don’t know why this posting states that “the iPhone version of the app costs money.” I’m running it on my iPhone when I’m at work over wifi and it is bad ass!

  87. BusinessHut says:

    C’mon Pandora…adapt! I am a huge fan of Pandora and would rather not see them close their doors. Why is it that once these innovative VC/internet/web 2.0/whathaveyou companies get successful, they become like every other company? This is a bump in the road. If your business environment changes, change your business model! Be the creative and innovative people that got you here in the first place. Don’t just quit because it got hard again!

  88. Mikestan says:

    @Joafu: No not monkeys but a bunch of old people who are so out of touch with today’s youth and technology that they can’t figure out how they can make a profit from services that are offered for free.

  89. Zephyr7 says:

    It took a bit of digging on Sound Exchange’s website, but if you want to try and change their minds, here’s the address:


    1330 Connecticut Avenue, N.W.
    Suite 330
    Washington, DC 20036

  90. Meathamper says:

    It’s not right. A services that benefits the people who could have bought the songs they were listening to is going bust? I don’t know about you, but as an avid Pandora user, all the music I buy from iTunes are the albums I enjoyed on Pandora.

  91. Bob says:

    Thanks SoundExchange for teaching us how badly needed copyright reform is. This is nothing more than an abuse of the copyright laws and the artist you say you represent. Now that Pandora will be shut down soon because you wouldn’t balance the needs of the artists getting paid for their work and the need of artists to have outlets to connect to their potential fans.

    Also thank you for the ability of artists and fans to contact you when we have a question or concern on the web site…….NOT! You don’t want to hear from the artists and fans about your stupidity in shutting down Pandora.

    Remember that when you outlaw the distribution of Artist X’s work only outlaws will hear Artist X’s work while Artist X doesn’t get paid.