Pandora: If We're Getting Taxed So Heavily By SoundExchange, Radio Should Be Too

from the strange-bedfellows dept

Well, this is rather disappointing. Just days after caving in and agreeing to new webcaster rates that will harm pretty much everyone, Pandora has gotten right into bed with the RIAA/SoundExchange in supporting the Performance Right Act (the RIAA Bailout Act) to extend a similar unnecessary tax on radio. Pandora's reasoning is no surprise: basically it's saying that if it has to pay such a silly tax to help promote musicians, it's unfair that radio stations get away without paying something similar. But, still, it's disappointing. Rather than looking at adding value to the overall market, Pandora has basically decided that it's "enemy's enemy is a friend" and is supporting such a law simply because it will harm radio stations. This makes me think significantly less of Pandora.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    John Doe, Jul 14th, 2009 @ 12:40pm

    Survival of the whinniest?

    Seems they know that the tax is going to kill them so they want to take radio down with them. Frankly, I will be glad when the labels finally do die so we will get real choices in when, where and how we listen to music.

     

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    Grey Ferret, Jul 14th, 2009 @ 12:48pm

    If the tax doesn't kill Pandora, this publicity will. I was shocked to read this news, and I'm definately reconsidering my choice to use their service.

     

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    AdamR1, Jul 14th, 2009 @ 12:52pm

    I guess what's good for the goose is good was the gander?

    I'm not a bit surprised and knew this was coming, why else settle. It now it gets intresting let's see what approach N.A.B takes on this.

     

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    mobiGeek, Jul 14th, 2009 @ 12:55pm

    Working within the system?

    I don't know enough about Pandora's people/culture, but is it possible that they are taking a "from within the system" approach?

    Fighting the RIAA would drain them of resources, specifically management and executive focus, for a long long time, essentially bleeding them to death.

    By giving in early, yes they will lose more money in the short run (paying high taxes today rather than fight the long long fight), but they can focus on their business immediately.

    So now that they are "in" with the RIAA, by stirring up the hornets' nest that will be radio stations facing stiff taxes, isn't Pandora doing lots of entities in the industry a favor? Or at least, isn't that one potential read?

    I mean...I'm just sayin'

     

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    Joe K (profile), Jul 14th, 2009 @ 12:56pm

    I see this more as play by Pandora to ultimately get the new rates thrown out or lowered.

    If Pandora is successful in convincing the right people that all broadcasters, regardless of method of broadcast should pay the same rate, the traditional broadcasters more powerful lobby would have more luck in negotiating lower rates.

    I'm probably way off, but that's how I would like to see it play out.

     

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    Anonymous Coward, Jul 14th, 2009 @ 1:04pm

    Re: Survival of the whinniest?

    More likely they are trying to co-opt Radio's substantial lobbying resources to squelch these ridiculous rates. Besides, turn about is fair play. It was the Radio industry that lobbied to treat internet radio as a performance rather than as a broadcast. Looks like they are returning the favor.

     

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    maclizard (profile), Jul 14th, 2009 @ 1:04pm

    Lets wait and see

    I know that this doesn't look good for Pandora, and believe when I say that I died a little inside when I heard about this, but this could still very much go either way. The obvious, and massively destructive, path that this can take is that Pandora really has stuck its dick into a succubus. However, it is possible that Pandora is just trying to get someone other than Pandora to speak up. Other than a story about a high-school radio station I have heard nothing about traditional radio fighting back.

    Note: If Pandora really has gone to the darkside, I will go right back to downloading music via torrents. The RIAA will never win...

     

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    Designerfx (profile), Jul 14th, 2009 @ 1:05pm

    Re:

    I kind of agree, that Pandora now has a way to demonstrate damages by the agreement they have signed. They have a hard copy to use if this goes to court, none of that "they verbally offered me x" crud.

    meanwhile, it's still a bit of a backwards approach. They could always have done this WAY BEFORE having ever signed a contract instead, but I guess they like going bankrupt.

     

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    Mark P, Jul 14th, 2009 @ 1:07pm

    Re:

    Agreed. I think Pandora is simply trying to draw the broadcasting lobby into this fight.

     

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    Anonymous Poster, Jul 14th, 2009 @ 1:12pm

    And now I can stop using Pandora and recommending Pandora to others.

    Another victim of the MAFIAA.

     

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    Mechwarrior, Jul 14th, 2009 @ 1:19pm

    This is looking more like a stratagem then acquiescence to RIAA. Pandora is trying to get its own rates lowered by forcing the radio lobby into the fight.

    Either Pandora is staffed by idiots or tacticians.

     

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    Anonymous Coward, Jul 14th, 2009 @ 1:20pm

    closing my pandora browser now..

     

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    Phillip (profile), Jul 14th, 2009 @ 1:26pm

    Re:

    I agree. I heard this and was already debating on switching to slacker.com and last.fm, but this put me over the line.

    Pandora was a great service, I'm sorry it's gone down this way.

     

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    JAy., Jul 14th, 2009 @ 1:27pm

    Uhh - I think this sentence needs to be reworded...

    ...[Pandora] has basically decided that it's "enemy's enemy is a friend"...

    Wouldn't that mean that since RIAA is Pandora's enemy, and NAB is RIAA's enemy, then NAB (the enemy's enemy) is Pandora's friend, and Pandora should help them?

    More like, "If I can't have cake, no one can!"

     

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    Anonymous Coward, Jul 14th, 2009 @ 1:27pm

    Pandora is a company. Their options are to die in court or to try to make it work. They've announced financial troubles previously. They were attempting to make a free business model work. Now laws have hampered their ability to compete.

    I can't believe anyone would "think significantly less of Pandora" for wanting the competition to play on a level field. Are you suggesting that they should oppose rules for the competition and hamper their own business?

    I hope the upside of this is more talk radio. Currently my choices are: Sports Talk, Conservative Talk, and NPR. However, I have 5 top 40 stations that play the same 3 songs, such as "Halo" by Beyonce. I bet it's on at least one station right now.

    I'd love some other talk formats, particularly in the off hours, when music may no longer be profitable. If not, I can only hope that the RIAA loses more money over this.

    I'm very curious about how many laws the RIAA supported that weren't passed, and why these laws haven't fixed the problem for them? It would seem like writing laws would almost guarantee success.

     

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    Anonymous Coward, Jul 14th, 2009 @ 1:30pm

    Pandora's new offering is stupid anyway. They want you to pay to listen to more than 40 hours per month. Who is paying anything when they simply can switch to another webcaster when their 40 hours runs out? With the usury rates and a worthless subscription plan I think this is a failed business model.

     

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    nraddin (profile), Jul 14th, 2009 @ 1:36pm

    My Enemy's enemy is my allie if not my friend

    Good for them, honestly. I could care less if they live or die by the business model they have agreed to let the Music industry dictate to them. And if they can get Radio stations forced to pay the same kind of fees maybe they can die by that sword too. Hopefully EMI and the like will be successful and putting out of business most of the music retail chains as well. And then, just maybe after all the business models that generated income for the major labels is dead and gone we can go back to having Musicians play music for a living, not just a few making millions why the rest make nothing. Maybe some of those millions that the Major Labels make will stay in the market and more bands can make a living at it.

    Believe it or not, before DVDs, CDs, LPs, Tapes, 8-tracks, TV, the Internet, or even Radio there was music and people made a living playing it.


    I am not holding my breath, but I am happy to see that more and more companies, businesses and individuals are signing up to destroy their own business. The Labels have not figured it out yet but their allies are their enemies even while they are enemies to the public. I am happy to see that one day, with a little luck, the labels will be saying "We have met the enemy and they are us", as they shutter their doors.

     

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  18.  
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    mklinker, Jul 14th, 2009 @ 1:40pm

    Re:

    I agree with the above posters, and what's most disappointing is that I just no more than 2 months ago decided that I should create a paid account.

    If I'd only known where that money was going and help to fund, I never would have made the choice. I love Pandora (err, did) but I am definitely looking for a replacement now :(

     

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    arrgster, Jul 14th, 2009 @ 1:42pm

    radio has a bigger lobby

    If they can piss off the radio lobby it will work in their favor. If radio fights back and wins, Pandora can show the tax is unfair...

     

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    mjb5406 (profile), Jul 14th, 2009 @ 1:42pm

    Reverse Psychology?

    Maybe their thinking is that radio, with its buge audience and deeper pockets, could fight such a ta and, as a result, point out that webcasting should also be exempt. I know... I'm playing devil's advocate, but it could be true. What's wrong with trying to leverage someone else's lawyers for your own purposes?

     

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    Anonymous reader, Jul 14th, 2009 @ 1:44pm

    Smart approach, not dissappointing

    This is actually a very smart approach to taking down a ridiculous tax that is being applied to their company. Smaller pandora is using the larger national radio to fight this idiotic tax. I mean, there taking the approach of that little nerd at school who does all the football players homework. No one messes with that kid. This is a way to stand up for themselves without taking a direct hit,(figuratively because they are paying the taxes upfront right now.) I agree that they shouldn't have to pay the tax if national radio doesn't, because this is a dumb tax.

     

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    kyra, Jul 14th, 2009 @ 1:49pm

    wow, totally disappointed

    I was really becoming a supporter of Pandora and was considering a paid subscription. I've always like listening to radio commercial free and had subscribed to xm before they got stupid. I guess I'll just have to try another radio and see how this plays out.

     

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  23.  
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    Dan Perlman (profile), Jul 14th, 2009 @ 1:52pm

    I hate "strategic" moves

    Makes me feel better about using last.fm, I used to feel like I was cheating on Pandora.

    Even if it's just a strategy for bringing radio into the fight, it reeks of "ends justify the means".

     

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    you can hate me, Jul 14th, 2009 @ 1:53pm

    What do you all do for a living?

    So why shouldn't a business enterprise (Pandora) pay for the inputs (music) it uses to create its very successful product. I don't get the creed that you all subscribe to - that somehow music should always and everytime be free and anyone who deviates from this is somehow a sell-out to the "man". It must be nice to live in this simple, binary world. But everyone else (including innovative people like those who run Pandora) must exist in the real world where hardworking artists (and, yes record companies) would like to make a living just like you.

     

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  25.  
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    SteveD (profile), Jul 14th, 2009 @ 1:54pm

    This is no time for idealists

    Pandora is doing what it needs to do to survive. If the only route to that is to work with the system (and don't try and tell me they haven't pursued every other possibility), then so be it.

    Mike's stance is hopelessly idealistic. Pandora are arguing for a level playing field on which to compete. Web radio is never going to be able to fight the RIAA alone, but if FM radio is forced into the same position we'll see a lot more lively discussion of the issues.

     

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  26.  
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    Eric, Jul 14th, 2009 @ 1:54pm

    You guys responding don't know what you are talking about. Pandora is saying that it's patently unfair to tax them because they are for all intents and purposes the same as radio. They (Pandora) know that a tax like this WILL NOT FLY on public radio, and in as much, will probably cause a reversal of their own tax.

    so many youngsters posting these days.

     

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  27.  
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    MojoMania, Jul 14th, 2009 @ 1:57pm

    Wow - here we go again...

    It's hard to stomach yet another cool new technology that empowers and innovates getting bamboozled by anachronistic gate keepers.

     

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  28.  
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    you can hate me, Jul 14th, 2009 @ 2:01pm

    Re:

    you don't know what you are talking about. first, this isn't a "tax". I know it feels good to use that term and it's become part of the robotic attack on paying for content, but you're all being played by falling for that.
    Second, even if the radio broadcasters beat back the effort to get them to pay for the music they use, webcasters and satellite and cable, etc will still have to pay. Your 'reverse psychology' theory is nonsense. The requirement that Pandora and others pay a statutory licensing fee is federal law. that isn't going away no matter what happens to the broadcasters. Sorry, you'll need another theory.

     

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  29.  
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    Moderation, Jul 14th, 2009 @ 2:18pm

    Hehe You can hate me is obviously a plant...

    Dude, you'll loose... It isn't a "tax" because it isn't issued by the govt... but it's just as bad or IMHO worse. Radio... Internet broadcasters... all the same. Ultimately it will all get settled out and I think Eric has the right idea.

     

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    MattP, Jul 14th, 2009 @ 2:19pm

    Re: Re:

    last.fm is a solid service and has replaced pandora as my go to.

     

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  31.  
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    Nismoto, Jul 14th, 2009 @ 2:31pm

    Re: Re:

    Gone down what way? Yeah, Tim is pretty much whining like a little kid but with good reason: traditional radio stations don't pay the higher performance royalties that internet radio stations pay. He's just trying to "return the favor" and stick it to traditional radio stations since they're treated differently.

    All the major internet radio stations will have to pay up, not just Pandora. Go ahead and switch to slacker.com, they pay the same royalties as Pandora according to the NY Times:
    "Webcasters with significant advertising revenue, like Pandora or Slacker, will pay the greater of 25 percent of revenue or a fee each time a listener hears a song, starting at .08 cent for songs streamed in 2006 and increasing to .14 cent in 2015."

     

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  32.  
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    NIsmoto, Jul 14th, 2009 @ 2:35pm

    Re: Re:

    What are you talking about? Pandora's BEEN battling the royalty fees for years. It should not have been a surprise.

    Like I said earlier, Pandora is not the only internet radio station that will have to pay royalties.

    I've been a Pandora listener for years and will continue to use their service until the bitter end. Thanks Tim!

     

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  33.  
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    Ryan, Jul 14th, 2009 @ 2:42pm

    Re: What do you all do for a living?

    So why shouldn't a business enterprise (Pandora) pay for the inputs (music) it uses to create its very successful product.

    For one thing, the inputs are free, so there's no marginal cost to producers for having their work broadcast on Pandora; rather, it often makes money for the producers to have the free publicity. Why shouldn't a music distributor pay for the advertising service Pandora is providing? And anyway, the market compelled Pandora to pay for it, then it would. The fact that we need government intervention just proves that doing so runs counter to market forces.

    I don't get the creed that you all subscribe to - that somehow music should always and everytime be free and anyone who deviates from this is somehow a sell-out to the "man".

    Who says music should always be free? If people want to pay for it, they're welcome to do so. The iTunes store is quite popular if you haven't noticed. The issue is with lobbying government to force consumers to subsidize poor business models. I feel that when I fart in public, that the people around me should pay me for the pleasure of smelling my fart. They refuse to do so, but I don't go crying to Congress to enact a bill to force them.

    It must be nice to live in this simple, binary world.

    It must be nice to make the income you do as an industry shill. I base this assumption on the fact that your argument is simplistic, banal, and misrepresentative of others' views.

    But everyone else (including innovative people like those who run Pandora) must exist in the real world where hardworking artists (and, yes record companies) would like to make a living just like you.

    I want to make a living selling my farts to random passersby! Should the government pass a law for my benefit to ensure my income? Or should I find a better business model? Music is approaching free because the marginal cost of additional copies is zero; it is a scarce good. Unlike you, some of us have actually taken Economics 101 and understand the basic concept of a supply and demand curve. Musicians are in no way prevented from making a living; they just need to adapt their business models. Unless, of course, they're not innovative and use the government to prevent innovative people like Pandora from making a living.

     

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    Gabriel, Jul 14th, 2009 @ 2:48pm

    Is it just me, or shouldn't a "performance" involve actual... you know.... PERFORMERS?

    Since when is playing back pre-recorded music a "performance"?

     

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    Anonymous Coward, Jul 14th, 2009 @ 3:02pm

    Just sayin'

    Since Radio has much deeper pockets - it's likely they will be able to put up a better fight than the individual webcasters - if radio wins then a precedent is set that webcasts might be able use to reverse the current situation.

     

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    ChurchHatesTucker (profile), Jul 14th, 2009 @ 3:24pm

    Re: What do you all do for a living?

    "So why shouldn't a business enterprise (Pandora) pay for the inputs (music) it uses to create its very successful product. "

    Go read up on "payola" and then come back and tell me who's adding the value.

     

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    Anonymous Coward, Jul 14th, 2009 @ 3:59pm

    I would much rather have someone else spend their money and time to fight a battle for which I would gain from, either through one side being decimated, or through agreements that would flow back to me. Sounds like a great battle strategy, sounds like a familiar one.

    http://en.wikipedia.org/wiki/Mao_Zedong

     

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    Adam, Jul 14th, 2009 @ 4:05pm

    Wow there is alot of people who don't understand what pandora is doing. Some people got it, but alot didn't. This is Pandora's way of fighting. If i have to pay well then they have to as well. They know they will complain and it will either be lessened or changed to be more manageable. If anything I think alot of these fees/taxes are just another way the RIAA execs can get more money they dont deserve imho.

     

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    Anonymous Coward, Jul 14th, 2009 @ 4:21pm

    I agree with them. It doesn't make sense for pandora to pay, and you CANNOT honestly expect them to be unaffected by the huge rates imposed on their service but not on a direct competitor?

     

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    Anonymous Coward, Jul 14th, 2009 @ 4:32pm

    Re:

    I see this as the same way, really. Pandora may be giving in, but I see it as them just showing everyone how ludicrous the whole situation is, Radio stations are going to fight it tooth and nail until it gets abolished.

     

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    Ms Escape, Jul 14th, 2009 @ 4:59pm

    HA!

    If pandora has to pay to bring a variety of music to the masses, regular radio stations should have to pay to keep playing that cookie-cutter craptastic noise over and over again.

    So what if it happens to fall in league with the RIAA? It's obvious that the RIAA keeps shooting itself in the foot. I mean, just because you might be mad at your mother doesn't mean you're going to jump off a bridge just to spite her ... some sensibility needs to be left to self-preservation.

    This is an excellent plan, bringing in the big guns to fight. Let's bring as many sectors and people in on this as we can!

     

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    Jim A, Jul 14th, 2009 @ 5:25pm

    They fought the good fight

    and stood for the artists, who historically have not gotten a fair share of the pie.

    They created the music that fuels the whole industry.

    I think this would be good stimulus for musicians, overall - look at it from a different angle.

     

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    Glenn, Jul 14th, 2009 @ 5:30pm

    Hah...

    Truth hurts, huh? Yep, everyone deserves to be persecuted just as much as everyone else does. Once they're all through pissing on each other... well, no one wins a pissing contest.

     

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    Lamer, Jul 14th, 2009 @ 5:33pm

    Get more groups strongly onboard the hate bandwagon

    I think this is a great way to get even more, larger, and old time businesses to turn on the RIAA. Its not enough that the RIAA and every computer user in the country hates them. Now they will get the wrath of the Radio industry. Do not understimate the power of Clear Channel, CBS, when they get upset.

     

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  45.  
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    Anonymous Coward, Jul 14th, 2009 @ 5:41pm

    Pandora is probably one of the most innovative music services ever, and legally is essentially at the recording industry's mercy.

    The current ridiculous rates will probably kill Pandora (and its competitors) eventually, but applying the same rates to the already far more competitive broadcast radio industry will pretty much kill it all instantly (how many radio stations have margins well above 25% now?).

    However you feel about whether radio stations should be paying the recording industry or vice versa, it's in no one's best interest to kill all radio. Using this "level playing field" argument is Pandora's best chance to improve its negotiating position.

    (Personally, on broadcast radio I more or less only listen to NPR and my local classical station (for which, in my opinion, it makes a lot more sense for the station to be paying royalties to the performers, since my being exposed to a piece of music isn't as likely to lead to my buying that particular recording).)

     

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    Anonymous Coward, Jul 14th, 2009 @ 5:57pm

    Just to make it a bit clearer that Pandora is not "in bed with the RIAA" note that in this legislation, the recording industry is trying for a 0.5%-3% tax on radio station revenue that will extract some nice money for the RIAA without killing the stations.

    What Pandora is saying is that, for the sake of fairness, this should instead be 25%, which the RIAA most definitely doesn't want, since it would just kill radio rather than letting them extract money. The idea isn't to get a 25% law passed for radio (which no one wants) but rather to get the web rate lowered (ideally, I'm sure, to zero).

     

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    Nick, Jul 14th, 2009 @ 7:25pm

    Re:

    I think likely outcome is that radio will start charging artists for playing their songs and call it advertising fee. The same three songs will still play on all stations. :)

     

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    Mike, Jul 14th, 2009 @ 7:50pm

    Piss off the radio lobby, show em who's boss!

     

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  49.  
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    Anonymous Coward, Jul 14th, 2009 @ 9:25pm

    Re: What do you all do for a living?

    "So why shouldn't a business enterprise (Pandora) pay for the inputs (music) it uses to create its very successful product."

    A better question is why should they?

    An even better question is why shouldn't you be paying me for the air you're breathing?

     

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  50.  
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    Anonymous Coward, Jul 14th, 2009 @ 9:27pm

    Re: This is no time for idealists

    "Pandora is doing what it needs to do to survive."

    Hopefully, they won't (survive, that is).

     

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    Anonymous Coward, Jul 14th, 2009 @ 9:33pm

    Re: Re:

    you don't know what you are talking about. first, this isn't a "tax".

    A gov't imposed fee? That sure sounds like a tax to me.

    The requirement that Pandora and others pay a statutory licensing fee is federal law.

    And a lot of people call that kind of "fee" a tax.

     

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    Anonymous Coward, Jul 14th, 2009 @ 9:35pm

    Re:

    Wow there is alot of people who don't understand what pandora is doing. Some people got it, but alot didn't.

    Pandora has turned into a record industry whore.

     

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    Anonymous Coward, Jul 14th, 2009 @ 9:45pm

    Re:

    The idea isn't to get a 25% law passed for radio (which no one wants) but rather to get the web rate lowered (ideally, I'm sure, to zero).

    That won't happen.

    Now that the RIAA has Pandora dancing like a puppet on strings, they'll do and say whatever the RIAA wants them to. If the RIAA wants radio to pay a broadcast fee, Pandora will come out singing and dancing in favor of it. Pandora's hoping that if they kiss the RIAA's ass enough, then the RIAA will give them some payola to offset some of the webcasting fees they'll be paying.

     

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  54.  
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    Anonymous Coward, Jul 14th, 2009 @ 9:50pm

    Re:

    Piss off the radio lobby, show em who's boss!

    Well, the radio broadcasters didn't exactly come out in defense of the webcasters. It would be really funny to see that come back around and bite them in the ass now. Sometimes, what goes around comes around.

     

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  55.  
    identicon
    Anonymous Coward, Jul 14th, 2009 @ 11:38pm

    Re: What do you all do for a living?

    You're right, you're completely right. What's wrong with a company having to pay thru the nose for the privilege of selling my product, even if that means that added to all the other costs it will actually COST them money to broadcast instead of having that thing, how's it called. Profit? Dividends? Anyway, if they play my music they should give me 75% of the money, even if they already used 50% of it to cover expenses. What? What do you mean they can't pay 125% of the money they collect? Well it doesn't matter because the music is MINE MINE MINE MINE!

     

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  56.  
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    Isaac Ludwig, Jul 15th, 2009 @ 4:43am

    I will stick with the Pandora service...

    frankly, while this looks like a fruitless endeavor to me,
    whatever man, I enjoy the service and it's a GREAT alternative
    to find new music.

     

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  57.  
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    Killer_Tofu (profile), Jul 15th, 2009 @ 6:09am

    Sad but they deserve it

    This is very sad to hear about Pandora.
    I will have a hard time using them now knowing that they are part of this crap with royalties.
    The NAB and others really do have this coming though. They have spent so much time trying to screw over their competitors instead of competing, that they really do deserve this.
    What I love about the increased rates for all is that once they are all out of business, the companies forcing these rates will have a drastically decreased income.
    That should expose all of this for the sham it is.
    It really is sad though that so many people just let this happen and never talk to our representatives. Although, yah, I know they wouldn't listen to us anyways. Just maybe though, if enough people stood up, they might. Maybe. One can hope.

     

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  58.  
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    Anonymous Coward, Jul 15th, 2009 @ 7:34am

    I guess I'm not seeing this play by Pandora. Everyone says they settled to draw the radio lobby into the fight? Isn't this the same radio lobby that lobbied for the Pandora tax in the first place?

    The radio lobby will fight the tax for themselves. Actually they already are by carpet bombing ads on the radio about the tax, telling everyone to call their senator to complain. Funny, they don't mention Pandora or internet streaming at all in those spots. Too bad Pandora didn't do the same thing. The only spots I've heard in Pandora relate to needing a passport to get into Canada.

    Pandora is a good idea, but seems to be managed horribly, and I think that they are too inept to scheme up some grand plan to draw the NAB to their side of the fight. The NAB will fight for radio and only for radio.

     

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  59.  
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    Phillip (profile), Jul 15th, 2009 @ 7:35am

    Re: Re: Re:

    while they may be paying it, they aren't trying to pass this off as a good thing and get it pushed down on more people.

     

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  60.  
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    you can hate me, Jul 15th, 2009 @ 7:59am

    Re: Re: What do you all do for a living?

    I frankly think that basing your economic arguments on the relative value of your own farts is quite simplistic and banal, but that is a topic for another day.

    Inputs are not free. Whether you agree with the concept or not, we have placed value on intellectual property in this country since its founding (see the Constitution). You may disagree with the monetary value placed upon it and/or the extent to which IP owners should be able to leverage it (both arguments I totally accept and would argue are best left to the market to decide), but the notion that Pandora's inputs (ie music are "free") is ridiculous and wouldn't hold up in the business school I attended before becoming a shill for industry.

    Government involvement here is required mainly to create a compulsory license environment for companies like Pandora. It also creates a performance right for artists so they can legally exercise some control over their creations.

    iTunes isn't the right paradigm for your "free" argument. And, unfortunately the choice over whether to pay for a good can't reside with consumers as you suggest by saying "if people want to pay for it they can". People may want the 42' flat panel in your living room. Is it OK for them to take it if they don't "want to pay for it"?

    You simply have to view content, music, movies, software, whatever as a good that has value. The fact that its movement aroudn the world via the Internet carries no marginal cost is irrelevant and would be unpersuasive to any economist. If you do not subscribe to this fundamental reality, then you are right, and I will forever be doomed to a simplistic and banal worldview that cannot persuade your enlighted fart economics.

     

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  61.  
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    Anonymous Coward, Jul 15th, 2009 @ 8:12am

    Re: Re: Re: What do you all do for a living?

    You must be new here.

     

    reply to this | link to this | view in thread ]

  62.  
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    you can hate me, Jul 15th, 2009 @ 8:25am

    Re: Re: Re: Re: What do you all do for a living?

    yes, should I just leave??

     

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  63.  
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    Anonymous Coward, Jul 15th, 2009 @ 9:03am

    Re: Re: Re: Re: Re: What do you all do for a living?

    No, but it might help to read up on the general argument of scarcity of goods or the economics of infinite goods before you post stuff that's been regurgitated ad nasueum.

     

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  64.  
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    PRTV, Jul 15th, 2009 @ 9:10am

    Radio RIP

    I personally hope the radio performance fees go through. We'll see EXACTLY the same thing that happened to MTV when they were getting charged. Radio will switch over to talk format (2 music stations in my area have already announced they are going all talk this fall), Sure there won't be any more music radio (I don't listen anyways because it's only crap that's on) then the RIAA and the majors will loose another revenue stream, will shoot themselves in the foot and REALLY start hurting financially and the structure will collapse. Then we'll hopefully see a better, more independent music industry rise from the ashes. I think in order to do this the current slate needs to be wiped clean and start over.

     

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  65.  
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    monkyyy (profile), Jul 15th, 2009 @ 10:39am

    i dont think pandora is trying to survive cause it seems pretty hopeless now

    i think its trying to get the two people who pushed it down the most into a fight
    hoping one will fall making it possable for future webcasters to live

     

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  66.  
    icon
    Jon Bane (profile), Jul 15th, 2009 @ 11:06am

    Re: Smart approach, not dissappointing

    This is how I see it as well. Get the bigger pocket book to fight the fight.

     

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  67.  
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    you can hate me, Jul 15th, 2009 @ 12:44pm

    Re: Re: Re: Re: Re: Re: What do you all do for a living?

    fair enough. i'm not an expert on both, but theories are just that, right? I know the scarcity of goods theory has been used (maybe not ad nasueum yet) to explain the demise of the record industy and promote P2P. i agree that record companies have made big mistakes along the way. But I'm not sure that the abundance of goods theory alone is enough to construct an environment where the "goods" in question here should only be able to capture value thru downstream efforts such as ticket sales and t-shirt sales for the lucky few. Why is it so economically unsound for a small band on an indie label to want to make a few bucks every few months because their song gets played on the radio or on Pandora? sure they are getting publicity, but you can't eat publicity.

    Didn't Starbucks apply the abundance of goods theory in putting a store in every building in America only to shut many of them down??

    you're right that this is a crazy system that 100% of economists would never construct in a million years. I don't defend the industry and how it operates, I jsut defend the rights of artists to own what they create and get compensated (if they choose to)when their creations are used by others for financial gain. And you cannot escape the reality that radio and webcasters use music to build their business. this is great, but shoudl they not pay for music in the same way they pay for the electricity to power their stations??

     

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  68.  
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    TimW (profile), Jul 15th, 2009 @ 2:48pm

    from Pandora

    Very interesting to read all of these posts.

    Our support of this bill comes from a very simple place:

    1) I, and we as a company, believe artists should be paid for the value they provide radio (in all of its forms). In spite of the rough negotiation we've been through, we've NEVER suggested Pandora shouldn't pay royalties - only that we should pay less than the rates established by the 2007 CRB ruling. Artists deserve compensation. It's fair and it's the right thing to do.

    2) It's wrong that different forms of radio pay different amounts. The bill includes language establishing parity across all radio. We compete directly for listeners, and we provide all of the same benefits to artists that broadcast radio does. There's no justification for the inequity.

    These are the reasons we are supporting this bill.

    It is of course true that we compete with broadcast radio - so advocating for a royalty that negatively impacts their business can be seen as a competitive swipe. But that's not what this is about.

    Tim (Founder, Pandora)

     

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  69.  
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    jb, Jul 15th, 2009 @ 6:10pm

    intellectual property

    Right on Tim.

     

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  70.  
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    Geowil, Jul 15th, 2009 @ 7:16pm

    Pandora

    REally, i could give a crap what pandora does as long as they dont shut down or make us pay to use it or limit the songs we can listen to in a month (hearkening to the end of Launchcasts golden days essentially).

    Ever since Launchcast got royally raped by nbc or who the hell ever took over it, pandora has been my go to place for streaming music.

    I found a lot of metal bands that I like on there.

    though I do think someone has to assassinate the RIAA, they are really mucking everything up these days.

     

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  71.  
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    Anonymous Coward, Jul 16th, 2009 @ 12:50pm

    All of the people saying that Pandora is selling out are a bunch of idiots that need to learn how to read and follow the news and politics before they open their mouth and follow what the original article poster said.

    Why is Pandora saying that Radio stations should pay the same royalty charges so bad? Have you geniuses ever even stopped to think about it?

    Pandora, and any medium that lets a user listen to music, should have to pay royalties to the person who composed the music, that is how it should be. It is FAIR that way. In that case, how is it FAIR that Pandora (and other internet radios) should pay royalties but not broadcast radio?

    With that argument, explain again why Pandora's stance is so bad, please.

     

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  72.  
    identicon
    Anonymous Coward, Jul 16th, 2009 @ 6:07pm

    Re:

    Pandora, and any medium that lets a user listen to music, should have to pay royalties to the person who composed the music, that is how it should be. It is FAIR that way. In that case, how is it FAIR that Pandora (and other internet radios) should pay royalties but not broadcast radio?

    With that argument, explain again why Pandora's stance is so bad, please.


    This story isn't about songwriter royalties, which by the way radio *does* pay, but *performance* royalties.

    Maybe you should learn what you're talking about before going around calling people idiots so that you don't look like so much of one yourself.

     

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  73.  
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    Billy Hume, Jul 16th, 2009 @ 8:21pm

    There are a couple of things incorrect about this article. First off, this is not a tax. Taxes go to the government. This is to collect royalty that is paid to the musicians that perform on the songs that are being aired on the radio. Only 4 other countries besides the USA don't collect this royalty, those being: North Korea, Iran, Rowanda (can't remember the 4th).

    Second, this is not being collected to 'promote' musicians, it is being collected to pay musicians. If u had any idea about how musicians are paid, or actually, ripped off on most major and indie label recordings you'd have a different opinion about this.

    The reason so many people spout the incorrect info that I've read in this article is because there is a concerted smear campaign against this bill. You are falling for a bunch of lies.

     

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  74.  
    identicon
    Anonymous Coward, Jul 17th, 2009 @ 12:38am

    Re:

    First off, this is not a tax. Taxes go to the government.

    This is a tax. A financial charge or other levy imposed by gov't is a tax. The gov't can direct those funds elsewhere (for example, to Soundexchange), but it is still a tax.

    Only 4 other countries besides the USA don't collect this royalty, those being: North Korea, Iran, Rowanda (can't remember the 4th).

    Unless you can produce a credible citation for that, I'm calling bullshit.

    If u had any idea about how musicians are paid, or actually, ripped off on most major and indie label recordings you'd have a different opinion about this.

    More bullshit. I do and I don't.

    You are falling for a bunch of lies.

    From the likes of you, it seems.

     

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  75.  
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    John, Jul 27th, 2009 @ 9:37am

    this is disappointing

     

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  76.  
    identicon
    Music, Feb 15th, 2010 @ 9:37am

    Pandora is not available at my country...

     

    reply to this | link to this | view in thread ]


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