Pandora: Giant of Internet Radio Nears Its 'Last Stand'

"...should be able to set price caps on artwork owned by corporations"

Because copyright protection is not a right, but a limited privilege granted by the United States Constitution and intended to "promote the Progress of Science and useful Arts", not to make a sure $ for some corporation.

Hence the idea of compulsory licensing, for example. If the cost of the license, though, is prohibitive, it has the same effect of refusing a license, which (one could argue) would interfere with the progress of science and useful arts.

Actually, this is the solution for Pandora:

Go the route of a two-tier system, where users who listen to ad-supported music get to listen to music whose label doesn't demand more than $X, and to listen to music whose label demands too much you have to pay $Y per month, where Y must be calculated to cover the costs of the royalties. Pandora needs to realize that it's the future, and be confident about that. Relegate the music owned by extorting labels to the digital ghetto and be done with it. Eventually the great artists that are under a label will go independent, so you won't necessarily be killing off the best artists, in the long run. The important thing is that Pandora and it's investors have some balls.

This would work great for me, because the majority of the time, I don't really care all that much who I'm listening to, really; I'm after particular styles and sounds. Our current "system" of fan-dom is really just a way to keep track of what you like. If the Genome project is capable of keeping track of what I like for me,then I don't have to worry about who it is. This won't kill "fandom" either, because there will still be a handful of artists that I'll really like, and best of all, I'll discover them through the Genome's recommendations instead of ridiculous label promotions.

This reminded me of an essay in last week's New Yorker about "The Permission Problem" (http://www.newyorker.com/talk/financial/2008/08/11/080811ta_...). In summary, when too many stakeholders are involved in a deal, the deal tends to fall through, because any one of the stakeholders is likely to demand nearly the entire value of the deal (since they can kill it by denying their permission).

Radio (Internet and other) doesn't exactly fit that, since you could still have a viable radio station without playing, say, any Beatles songs, but it is similar. If, in order to have an Internet radio station, you needed to negotiate with the owner of every song you wanted to play, running such a station would be prohibitively expensive. Having an organization such as SoundExchange with the authority to collect royalties for copyright holders is one solution to that problem.

That doesn't answer your question, though. One answer is that such fees are so high that they make SoundExchange useless, at least as far as Internet radio goes (as opposed to Satellite), because no one can afford it, so such fees effectively kill Internet radio. If we were talking about a free market, an appropriate response to this could be, "let them die out, and some other competitor can take their place and make a better deal with Internet radio stations". However, we're not. SoundExchange is granted monopoly power by the US Copyright Office. If, in exchange for that power, it does not grant a fair deal to Internet radio stations, then US citizens should have the ability to act through their government to change that.

Note also that individual copyright holders are granted monopolies to those works by the government. A reasonable stance, I think, is - if the government gives you a monopoly on something, you have a responsibility to charge fair prices for that thing. Prices that prevent a new industry, for which there is much demand, from growing are probably not fair.

I wonder if it is not also the artists "fault": they chose to be represented by the music industry. Apparently alternative channels have not yet attracted sufficient talent to create a radio service based on it.

Besides the fact that there is no provision in the US constitution for treating ideas as property, it's wrong because webcasters are being treated wildly unfairly than other outlets. There is only one reason for this: the RIAA is afraid of them and wants to drive them out of business. That's actually illegal. And wrong.

BMI was invented to license artists to radio stations when ASCAP's fees were too high. ASCAP refused to lower their prices at first, they'd assume that nobody would want to listen to the unproven artists that BMI was signing. Fortunately for BMI and the world, people liked the upstarts just fine.

The time is ripe for another market entrant to modernize music distribution.

yeah I have OpenPandora running all the time(its the program to run Pandora w/o going to the site), it made me stop listening to my mp3s since with the pandora after you fine tune your preferences almost all the songs you hear are the ones you like.

"Our artists and copyright owners deserve to be fairly compensated for the blood and sweat that forms the core product of these businesses," said Mike Huppe, general counsel for SoundExchange."

Keeping in mind that traditional radio does not pay any fees for playing music, Mike Huppe is in for a treat if Pandora is shut down. Tons of infuriated, tech savvy users will have his name and an axe to grind. I don't think SoundExchange aka the _RIAA_ (nice try Suit factory) fully understands what they're getting in to.

Also related: This is not about the artists; the majority of those fees go to the labels - not the talent. Besides what does Mike Huppe know about blood and sweat? He shuffles papers around all day.

http://pview.findlaw.com/view/1570397_1?noconfirm=1

Edit: I've been reading traditional radio still pays fees. Regardless, they are a fraction of what Pandora may have to pay.

>"That makes me really sad"

Id say it makes a lot of people angry. It's also another step in making people reconsider the concept of copyright for music.

I think someone's mentioned it here in the discussion: Copyright protection is not an inalienable right (like the right to remain silent), it's an instrument designed to have some desirable result (like tax deductions). Copyright in this case is preventing innovative products & services, and very probably harmful to the art itself. 'Small' artists & genres have the most to gain from the potential of free music.

Pandora is flat-out one of the best marketing opportunities for the music industry. If they were smart, they'd be harnessing that, not trying to kill it.

You aren't being that facetious. My father was a restaurant manager in the 70s and he had to catalogue every record he had, how many times each song was played, and then cut a check to the appropriate record companies to avoid getting sued by them. This wasn't a chain restaurant or anything either, just a small little one. They are really assholes about playing your own music, luckily you are allowed to play internet, terrestrial, and satellite radio for free (they have yet to impose a fee on that I guess) and Pandora counts as internet radio so it makes a great solution for businesses.

Actually now that I think of it, Pandora should offer a business or premium plan. Because businesses have to display the name of the song/artist playing when they play the radio, Pandora should offer a simple, ad-free song title display that businesses can use when playing their songs. There's some revenue! Yay! Stay in existence please!

I know for a fact that Microsoft does quite a bit of lobbying. I would be surprised if Intel and Google weren't also in that game.

Sounds like they want to force web radio to run more intrusive advertising or to charge fees.

And if web radio won't, then they see it as giving away songs too cheaply that they want to artificially keep high-priced.

I think it comes back to not really wanting the internet to happen. And not necessarily irrationally.

The recording industry world has been in a pretty sweat spot. The current (& past) world creates a substantial income built on 1. selling albums, 2. strict adherance to a 90/10 rule (revenue/artists), 3. Periphery industries that support 1 & 2 (eg: movie soundtracks, radio).

Almost any step is a step away from that cushy world. So any slowing of change is good.

They totally should, BUT it seems SoundExchange STILL gets the money through something like lobbied-through by RIAA legislation of compulsory licensing even for non-label music (now that I'd call borderline criminal) http://www.theinquirer.net/en/inquirer/news/2007/04/30/riaa-... http://www.dailykos.com/story/2007/4/24/141326/870/429/32706...

That's actually an cool idea. I mean, if they can really pick your preferences effectively, you don't need 'stars' anymore.

The RIAA wants them gone. Period. They think they'll "win" when that happens.

...and you've just made the comment that makes me highly doubt that this is anything but a PR coup for the company, in their efforts to lobby the bureaucrats.

With millions of active users, I don't think Pandora would just fold up their tent and go home. Like the story says, there are lots of potential ways to monetize the service.

I hope this helps pave the way for micropayments.