Pandora Founder Says Rising Fees Threaten Webcaster - Blizzard Sector

**NewsDude** · 08-18-2008, 10:20 PM

A report has surfaced that Pandora -- the popular music-mix service for computers and mobile devices such as the iPhone -- may have to stop music streaming as royalty fees drain its cash.
In an interview published Saturday by The Washington Post, Pandora founder Tim Westergren said, "We're reaching a pull-the-plug kind of decision. This is like a last stand for Webcasting."
Fees not Equal?
At issue are the royalty fees paid by online, satellite and land radio stations. Each has a separate fee structure, and proponents of Webcasting radio feel the rates for their medium is unfairly targeted.
Satellite radio pays royalties based on the subscriber base -- an easy enough number to determine from week to week, and the fees amount to 1.6 cents per listener per hour, according to some estimates.
Traditional radio stations pay no performance royalty fees. So far, so good.
But the fees imposed on Internet-based radio are byzantine and difficult to track. Under the terms of a 2007 ruling by the Copyright Royalty Board (CRB), Internet-based services must pay a minimum of $500 per channel of content, plus about 60 cents per user per month. Per-song royalty rates from the CRB ruling were .0008 cents in 2006, .0011 cents in 2007, and .0014 cents this year, rising to .0018 cents in 2009 and .0019 cents in 2010.
Westergren estimated before a Senate subcommittee last month that these fees will amount to 70 percent of Pandora's revenue. And it's about to get worse. Under the 2007 agreement, fees will nearly double by 2010. If that weren't enough, hearings to begin soon will set royalty rates for 2011 and beyond, and many assume those rates will be even higher.
The Copyright Royalty Board is comprised of a three-judge panel, selected by the Librarian of Congress. In essence, the fate of all musical-performance...

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08-18-2008, 10:20 PM	#1 (permalink)
NewsDude Status: *** Elder Join Date: Mar 2008 Location: News Office Posts: 1,884** Tournaments Joined: 0 Tournament Wins: 0 Spent time on board: 0:05:24 Hours Rep Power: 4	A report has surfaced that Pandora -- the popular music-mix service for computers and mobile devices such as the iPhone -- may have to stop music streaming as royalty fees drain its cash. In an interview published Saturday by The Washington Post, Pandora founder Tim Westergren said, "We're reaching a pull-the-plug kind of decision. This is like a last stand for Webcasting." Fees not Equal? At issue are the royalty fees paid by online, satellite and land radio stations. Each has a separate fee structure, and proponents of Webcasting radio feel the rates for their medium is unfairly targeted. Satellite radio pays royalties based on the subscriber base -- an easy enough number to determine from week to week, and the fees amount to 1.6 cents per listener per hour, according to some estimates. Traditional radio stations pay no performance royalty fees. So far, so good. But the fees imposed on Internet-based radio are byzantine and difficult to track. Under the terms of a 2007 ruling by the Copyright Royalty Board (CRB), Internet-based services must pay a minimum of $500 per channel of content, plus about 60 cents per user per month. Per-song royalty rates from the CRB ruling were .0008 cents in 2006, .0011 cents in 2007, and .0014 cents this year, rising to .0018 cents in 2009 and .0019 cents in 2010. Westergren estimated before a Senate subcommittee last month that these fees will amount to 70 percent of Pandora's revenue. And it's about to get worse. Under the 2007 agreement, fees will nearly double by 2010. If that weren't enough, hearings to begin soon will set royalty rates for 2011 and beyond, and many assume those rates will be even higher. The Copyright Royalty Board is comprised of a three-judge panel, selected by the Librarian of Congress. In essence, the fate of all musical-performance... More...