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Pandora May Shut Down Due to Rising Royalty Fees

Sunday August 17, 2008 6:19 pm PDT by Arnold Kim
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.

SaveNetRadio.org serves as an action site against the legislation.
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coolb0yalex
Posted: 46 months ago
Sad. Time to migrate to AOL Radio.
Truely a great application for the iPhone though.
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11800506
Posted: 46 months ago
That's sad especially since it's such a great app. Hopefully they won't have to go under.
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nagromme
Posted: 46 months ago
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.
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Kingsly
Posted: 46 months ago
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. :o
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Flhusky
Posted: 46 months ago
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 ;)
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severe
Posted: 46 months ago
I "Shut Down" my personal use of it anyway. Couldn't get around the lousy audio quality.
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hexonxonx
Posted: 46 months ago

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.
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bigandy
Posted: 46 months ago
This has been on the cards for a long time.
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Diode
Posted: 46 months ago

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.
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jayducharme
Posted: 46 months ago

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. :(
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