Pandora May Shut Down Due to Rising Royalty Fees

[MacRumors]

The Washington Post reports that the popular web radio service Pandora is close to shutting down entirely due to recent increases in royalty fees that affect web streaming services.

Pandora has become relevant in the Apple world since the release of their iPhone music application called Pandora Radio [App Store]. The free application allows users to tune into personalized streaming radio stations based on their favorite artists, songs, or classical composers. Pandora currently is the 7th most popular application on Apple's iTunes App Store.

According to the Washington Post, last year a federal panel ordered a doubling of per-song performance royalties that Web radio stations had to pay to performers and record companies. Pandora is a venture capital funded business which currently makes money through web-based advertising. In the near future, however, Pandora plans to introduce subtle in-stream ads to combat rising costs:

The company will soon start running subtler ads similar to those on National Public Radio, too, he said.

"Something like 'The next half hour is brought to you by . . .' " he said.

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[coolb0yalex]

Sad. Time to migrate to AOL Radio.
Truely a great application for the iPhone though.

[11800506]

That's sad especially since it's such a great app. Hopefully they won't have to go under.

[nagromme]

I have no idea what a fair royalty would be, but I know I've heard a few ads creeping into my favorite online streaming radio stations this past year. Not too many (mostly asking for donations actually) but more than the near-zero I remember from years past.

I haven't tried Pandora yet but friends have recommended it highly and I plan to. If a few ads are needed to keep it afloat, I can deal with that.

[Kingsly]

If Pandora gets pulled, my life will be over. Literally. I will buy and gun and one bullet.







Okay maybe I'm being a little dramatic. But really. I hope Pandora sticks around.

[Flhusky]

DI.fm has been 'sponsored' by an online car insurance co. for awhile. You of course can get the better quality non-commercial streams for a small month fee.
Seems fair to pay the piper something.
Not everything in life can be free

[severe]

I "Shut Down" my personal use of it anyway. Couldn't get around the lousy audio quality.

[hexonxonx]

Originally Posted by severe

I "Shut Down" my personal use of it anyway. Couldn't get around the lousy audio quality.

I noticed that one night while wasting some free time at work. On 3G even it wasn't all that great. I switched over to Last FM which has stereo on 3G.

Why can't Pandora start charging for the App for all future downloads? It would be a nice way to pay those fees.

[bigandy]

This has been on the cards for a long time.

[Diode]

Last year, an obscure federal panel ordered a doubling of the per-song performance royalty that Web radio stations pay to performers and record companies.

Traditional radio, by contrast, pays no such fee. Satellite radio pays a fee but at a less onerous rate, at least by some measures.

Your US Government: Creating monopolies and limiting consumer choice since 1776.

[jayducharme]

Originally Posted by Flhusky

Not everything in life can be free

That was the claim when cable TV first appeared. I thought it was absurd to pay for something that was previously free. Cable TV's big advantage was that it was ad-free, but that didn't last too long. Once people were hooked on cable, ads began appearing. So the cable companies were double-dipping, getting revenue streams from their subscribers and also from advertisers. And there was no longer anything special about the service. I'll bet the same thing will happen with satellite radio. Money talks....

What upsets me about this whole royalty thing is that it seems like the artists -- who deserve the money -- rarely see any of it unless they have have high-paid lawyers and accountants to ride herd on the big labels. It's the corporations that seem to profit. Yet the RIAA is always tugging heartstrings, bemoaning the poor struggling writers.

So Pandora probably now has to pay off the RIAA in order to keep streaming music. The beauty of Pandora is how it can introduce me to music that I'll probably like, but that I never would have listened to otherwise. So really Pandora is helping to sell more music. It's a streaming service, so it's not like I'm getting free downloads. Pandora is being punished for helping to sell more music.

[slicecom]

Originally Posted by Kingsly

If Pandora gets pulled, my life will be over. Literally. I will buy and gun and one bullet.







Okay maybe I'm being a little dramatic. But really. I hope Pandora sticks around.

At least make yourself useful and buy a bunch of guns and go crazy in a room full of record industry execs.

[bytethese]

Holy crap that sucks!

I just started liking this app too! I'd even pay perhaps a $25/yr subscription fee. A shade over $2/mo seems reasonable.

[Shasterball]

Hey record labels, way to cut down on your free exposure!

[spazattack674]

That would be awful. I only knew about Pandora because of the iPhone app, and now I listen to it all the time on my computer and my iPhone.

In addition, Pandora provides great exposure for artists. I love many of the songs I hear, sometimes by obscure artists that I wouldn't normally listen to. After I hear it, I go to download the song usually, which I'm sure is a common practice. It seems that by Pandora shutting down due to high royalties, the record labels would be losing much more money than if they just lowered the royalties. If Pandora were to shut down, they would be losing the royalties that Pandora already pays, and would also be losing the free exposure that Pandora provides.

[Sweetbike40]

oh no. NO!!!!!!!

[SamLikesPi]

Sheesh, charge me for it. I love Pandora enough to subscribe to it as a service and/or purchase it as an App. Run a pay versionand an ad-supported version, but whatever they do it has to be a mandatory compliance system. If a failing service _requests_ donations, I usually do not comply. I don't like the idea of putting in my two or more cents on a failing ship where others likely won't follow suit.

You have a product, create a pricing scheme.

[wavelayer]

I agree. Charge for it. I'll buy. It's a great lil app!

[mwpeters8182]

Once again, the record companies are shooting themselves in the foot.

I can think of more than a handful of times I've been listening to Pandora, and heard a song from an artist that I hadn't been interested in, and checked out more of their music, and bought a few albums or songs.

But this doesn't surprise me - they want to decide what gets played, like on terrestrial radio.

[belisle]

Originally Posted by jayducharme

What upsets me about this whole royalty thing is that it seems like the artists -- who deserve the money -- rarely see any of it unless they have have high-paid lawyers and accountants to ride herd on the big labels.

That's not entirely accurate. If they're signed with a big label then, sure, it depends on what kind of a contract they have with the label.

Otherwise, are you artist or copyright owner of a performance work? Has your song been transmitted but you haven't registered with SoundExchange? Then they may owe you money. (I'd link directly to the "Unregistered List", but they redid the website in flash. And for that, they deserve to die.)

[esaleris]

I've bought absolutely tons more CDs after listening to Pandora. Every time I go to a store that sells CDs, I check my Pandora list and see if there's anything artists worth getting. And I buy a lot more albums from smaller, more obscure bands, especially online.

Net-net: Pandora has single-handedly increased my exposure - and subsequent - purchase of music CDs by multiples.

[IgnatiusTheKing]

Yet another case of the government sticking its nose where it does not belong, and it's only going to get worse when the entire government is controlled by success-hating socialists. The day Pandora has to shut down (or sell out to a huge corporation who will ruin it) will be a dark one, indeed.

[interlard]

This was a big topic about a year ago. Unfortunately very few people did anything about it, so here it is.

If you want the law to be changed, go to your local rep's website and tell them how bad it is to feed the fat monopolies and punish the little guy & consumer.

[DotComCTO]

They've got to move to a subscription model. Free with advertising, pay with no ads. Something along those lines. Pandora is a great service. I don't listen all the time (I'm a Sirius subscriber), but completely worth a reasonable monthly/yearly charge.



--DotComCTO

[timimbo85]

NOOOOOOOOOO. I never found an app that was just right for me!!!! It literally does kick so much ass. Its like free XM radio. I hope this doesn't happen. I love heavy metal ands its hard to find any station out there that plays it. This does it for me