RIAA May Get Its Wish: Pandora Leaning Towards Shutting Down Over Webcasting Royalties

from the how-the-RIAA-killed-internet-radio dept

Last year, we noted that the new webcasting royalty rates pushed through by the RIAA appeared designed specifically to kill internet radio. These royalties are different and much higher than things like traditional and satellite radio, despite being much more fragile at this point in their development. As if to prove the point, Pandora, one of the largest and most successful online streaming radio providers is now saying that it's going to have to shut down if the royalty rates aren't changed shortly.

This is exactly what the RIAA wants, by the way. Even if services like Pandora introduce people to tons of music (personally, I've bought a ton of music I found on Pandora), much of that music is not from an RIAA-member label. The RIAA knew exactly what it was doing in pushing these higher rates: it was killing off alternative routes to promoting non-RIAA music. The RIAA labels have always thrived off a very limited distribution and promotion channel. After all, distribution and promotion are where record labels really make their money. Competing methods of distribution and promotion are threats to be killed off -- and the RIAA may have succeeded here (with Congress' and the courts' help, of course).

Oh, and don't think the solution is to only play non-RIAA music. The RIAA's spinoff, SoundExchange, gets to collect money on non-RIAA music as well. Oh yeah, it gets better too: if SoundExchange can't find the musicians to pay, it gets to keep the money. That's why it has a history of not looking very hard for musicians in order to pay them.

Filed Under: royalties, streaming music
Companies: pandora, riaa, sound exchange

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  1. icon
    Killer_Tofu (profile), 18 Aug 2008 @ 11:59am


    I know it is technically the law that SoundExchange gets to collect on non-RIAA member songs royalties, but something has to be done to change that.
    Since congress has been bought out in this regard, ALL internet radio should boycott the paying of ANYTHING for non-RIAA member's songs. Why pay royalties on something to somebody who has absolutely less than nothing to do with it?
    If they all did it in unison, maybe congress would wake up, just a tiny, if we are lucky. I know I am hoping and asking for too much, but sometimes the people have to stand up for whats right when its pushed too far.

    If they all banded together, the industry could try to sue, and the officials could go after them. Then let us see the outcry of the public about how stupid these laws are once tons of attention is drawn to them beyond just our tech savvy crew.

    I know, I am way too optimistic sometimes.

    If Pandora goes down, my thoughts are perfectly in line with the first poster here. I will do everything I can to see the RIAA die as soon as possible, including marketing against them to my friends who buy lots of music.
    I have found lots of good music on Pandora. Yes, I do not buy it all, but I do buy some. And that some would have never been found without Pandora I am sure simply because it is not RIAA tripe.

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