Surprise: Internet Radio May Be Saved

Aron Schatz
September 24, 2008

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Pandora listeners, listen up. A new deal has been made from the cartels to based costs on revenue instead of per song. What happened was that Pandora threatened to shut down. The next part is pure speculation: When that happens, everyone listening to Pandora will move to downloading their music (any way possible). The cartels probably saw this as a bad idea and they now get publicity saying they are the good guys for making this deal... even though they screwed internet radio in the first place.


The groups, which represent record labels, music publishers, songwriters, and music Web sites, say their proposal would resolve what has been a source of strife between the music industry and Web sites that offer on-demand streaming services.

Under the agreement, sites like Napster and Imeem would have to begin paying royalties of about 10.5 percent of revenue. Download services like Amazon MP3 and iTunes already pay such fees. And online radio sites saw a major royalty hike last year. Pandora, one such site, may be on the brink of going out of business due to that rate increase, according to its founder, Tim Westergren.

The organizations involved were the Digital Media Association, the Nashville Songwriters Association International, the National Music Publishers Association, Recording Industry Association of America, and the Songwriters Guild of America.


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