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. identicon
    Anonymous Coward, 18 Aug 2008 @ 12:25pm

    Re: Re: Re: Re: screw the music industry

    I really meant "how can I hear the music to even find out if I like it?"

    And sorry if the artists suffer collateral damage, but if they don't like it, maybe they should find a different organization to align with. I'm not going to waste my time trying to make the distinction between the RIAA and the artists. I'm also not going to try to distinguish between which are RIAA artists and which aren't, because the ones that aren't are covered by SoundExchange, which I find just as revolting as the RIAA. So the only option left, to avoid supporting organizations that I find immoral and ethically repugnant, is to simply not buy music at all. I might pick up some stuff at a garage sale or on eBay, but I won't buy any music from any retailer on this planet.

    But I will happily download whatever I that I like.

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