New fees are big trouble for Pandora

[KenR]

Here's an interesting article about how a new legal ruling threatens Pandora, a music service discussed a lot in the DonationCoder forum.

A Copyright Royalty Board decision last week chose to adopt a strict new fee structure proposed by a collection body of the RIAA for all web streams, far out of proportion to the fees paid by other media (broadcast, satellite radio) and previous paid by radio streams. Will the higher fees benefit musicians? Not if you ask the streamers; numerous arguments online suggest the cost of the new fees would actually exceed income, from everyone from small streams to enormous ones, and could threaten services like Pandora...

http://createdigitalmusic.com/2007/03/16/if-streaming-rates-stand-well-have-to-shutter-says-pandora-founder/#more-1946

[justice]

And not just Pandora either:

http://somafm.com/news/

The Copyright Royalty Board has announced new copyright licensing fees for internet radio stations. The new fees are a staggering increase over our previous annual royalty rate of about $22,000 to over $600,000 for 2006. And the fees are even higher in 2007, based on our current listenership, they'll be over $1 million dollars for 2007! (Which is 3-4 times what we hope to raise in 2007). If you think this is unfair to internet radio, and you are an American citizen, you can send a letter to your congressman showing your support for internet radio. We already have the attention of Congress, so now you have to let them know you support internet radio and that royalty rates shouldn't be structured in a way that will put small webcasters out of business.

We need to raise at least $15,000 each month to meet our current minimum operating budget. (The newly announced royalty rates will substantially increase our costs!)

[tinyvillager]

The entertainment industry is so daft when it comes to the internet.This is music lovers advertising their favorite artists,it benefits the artist.They are literally biting the hand that feeds.

I can understand crackdowns on P2P,that's flat out piracy.But when you stream a tune,that's not even cd quality and most people don't know how to rip (download) and once it is ripped doesn't come close to listening to the cd,that so lame.The industry is shooting itself in the foot.