Online Radio in Peril... Again

Tim Westergren, the founder of the web radio service Pandora, has said in an interview with The Washington Post that his company may be close to a shutdown. He stated that the company is approaching a "pull the plug kind of decision" and that "This is like a last stand for webcasting". He reports the problem stems from last year's royalty hike for web radio which makes it extremely expensive for independents, like Pandora, to stay afloat in the business. The increase will eat up 70 percent of Pandora's $25 million in revenue. This situation also effects other music streaming sites such as Last.fm, Shoutcast, and Live365. SoundExchange, an organization comprised of record label representatives and performers, believes that internet radio owes a bigger portion of profits than traditional radio. It appears SoundExchange continues to cut favorable deals with satellite and cable radio while not negotiating in good faith with webcasters. Organizations like the SaveNetRadio Coalition, as well as, independent webcasters like Pandora have fought the increased fees. Why more artists aren't coming out to decry these fees is puzzling. Net radio serves to provide them with a large amount of free exposure they would otherwise not receive. The short sighted focus on immediate and large royalties from webcasters is just one more example of the greed of the music industry and its effort to remain in the role as "gate keeper". The industry is slowly learning its lesson about DRM and should take the same heed regarding these royalty fees. What can you do? Visit SaveNetRadio.org. There you will find information for contacting your local legislator and voicing your opinion regarding internet radio. It would be tragic to see such a wonderful medium disappear due to the greed of a privileged few.