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
    Pjerky, 18 Aug 2008 @ 10:21pm

    The RIAA is illegal!

    I find it amazing that the RIAA hasn't be brought up on charges of racketeering, anti-trust, and larceny yet. What they are doing is highly illegal. First, even if you are not a member of the RIAA, their collection organization, SoundExchange, has the "right" to collect fees for your music being played. And they don't have to give you the money they collect until after you have proven ownership of the music and have paid for membership into their organization.

    Essentially forcing all music to be paid for, irregardless of whether or not the copyright owners want the music to be paid for or not.

    The only solution for this is a two-fold solution. First of all for everyone everywhere to only listen to non-RIAA music and secondly for the organizations and individuals that play said music to refuse to give a dime to SoundExchange. If enough of us refuse, which is very easy not only morally and ethically, but also would be easy to win legally in the long run (no jury would side against you on this).

    Refuse to pay the RIAA!
    The RIAA are nothing but a bunch of wallet-raping terrorists.

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