An article in the Washington Post broadcasts news that Pandora is “approaching a pull-the-plug kind of decision” according to its founder Tim Westergren. This dire forewarnings of course stem from the still unsettled ridiculousness brought on by the Copyright Royalty Board’s decision to up the royalty rates charged to web radio producers that essentially would put those companies out of business the fee structure is so high. I love how the Washington Post calls the CRB an “obscure federal panel.”
In Pandora’s case we’re talking 70 percent of their revenue stream. And if I’m correct this only gets worse as the rate structure gets higher as we head to 2010.
Pandora’s plea in the Washington Post might be aiming for negotiating leverage. US Rep Howard Berman is trying to broker a deal and we all know when big money is at stake playing to the press is a typical card taken out of the deck.
Well, call off the negotiating. I think Pandora should just pull the plug. Take $17 million off the table. Others should follow suit. Let the Sound Exchange explain that to its clients. The music industry sorely needs that dough to pay the legions of lawyers it keeps employed defending its eventually-to-die business model. Don’t let talk of compensating artists fool you. The music industry got out of the music making business long ago and doesn’t think of musicians and singers as artists as much as they see them as widgets. The percentage of those funds that actually make it to the artists is ridiculous compared to the legal and trumped up overhead that eats the cash.
I think Pandora and others like them should tell the music biz to go blow. Maybe there will be some consumer outrage that might actually shake things up. I have my doubts there. There will be all sorts of hysteria about how this will create more piracy. I’m guessing that someone has made the calculation in the music biz that for the moment it is more lucrative to chase after pirates than it is to collect royalties. At least that keeps the lawyers working.
