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Tuesday, September, 23, 2008 by Mel Phillips.
To be sure, Pandora is not the only Internet radio station. It just seems that way because they’ve made the biggest stink about rising royalty rates. Their fans number 16 million and that number continues to grow thanks in great part to developing a version of their free service for Apple’s 3G iPhone. Pandora now ranks as the 10th most popular free application on Apple’s App Store. Despite its popularity, Pandora faces extinction. In July, Pandora chief executive Joe Kennedy, testifying at a Senate Judiciary said that “based on the dramatic rate increases established by the Copyright Royalty Board, we are facing the prospect of paying $18 million in sound recording royalties in 2008, over 70% of our anticipated $25 million in revenue.” …
Two bills have been proposed, including one that seeks to nullify the Copyright Royalty Board ruling but that bill is on hold while the Digital Media Association tries to negotiate with the RIAA’s SoundExchange. The likelihood of anything stopping the rise in royalty rates is not good but survival for Pandora is possible if either Apple or Amazon buy the company. So far little interest is being shown by either…
Fans of Pandora may be kvelling and quivering in hopes of keeping their free music service alive but don’t look for support from terrestrial radio. It’s survival of the fittest and with radio trying to stay alive itself - Pandora - you’re on your own. And that’s the way it should be…
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