Will Pandora Be Leaving Us Soon?
The Washington Post reports that Pandora, a music website that lets you create your own radio station, may soon be closing its doors. Due to high liscensing fees owed to SoundExchange, Pandora may be drive out of business. Of its estimated $25 million in revenues, Pandora would owe 70% to SoundExchange.
Pandora has been battling against the high Internet royalties for the past year since royalties owed by Internet radio stations were doubled. Pandora maintains these fees are biased against websites considering that normal radio stations do not pay such fees and satellite radio stations pay significantly lower fees.
It is tough to say whether or not this is saber rattling or the real deal, but I will be sad to see Pandora go if it comes to that. It is my favorite music site mainly because I like how it connects bands and songs based on the actual music rather than a social networking algorithm. So, here's to hoping everything works out in the end.
I seem to remember Pandora warning that they would be in a difficult situation last year. One year later, they’re saying the same thing. I can forgive them for just trying to drum up more sympathy, or maybe more leverage at the bargaining table, which I really hope is what they’re doing. But it seems more likely that they’re right on the edge. If they do shut down, the music industry will have shot itself in the foot again.