Pandora on the brink of closing down
August 20th, 2008, 6:57 pm Hobby Shops
They must have aching hands on Fourteenth Street from high-fiving each other this morning. I bet someone has even proposed another round of royalty forfeitures to finance champagne in the SoundExchange break room this afternoon.
This certainly must be, at least from SoundExchange’s standpoint, a red-letter day in their struggle to see that recording artists (Labels? What labels? Forget the fact that labels get more than half the license revenue, this is all about the artists we can’t find 40,000 of)) are fairly compensated for streaming broadcasts of their recordings. After all, how many times has SoundExchange been able to, in one fell swoop, threaten the existence of a music performance program that all by itself represents literally millions of discrete channels of delivery.
Maybe there’s a way for Pandora to make more money without completely corrupting their vision. Westergren even suggests some possibilities in the Post article. Will it be enough to pay the SoundExchange bill that now, according to Westergren, equals 70% of their total revenue? I doubt it. I think Westergren doubts it too, or he wouldn’t be so pessimistic about the future.
The death of Pandora will have an impact beyond simply removing a valuable way to hear new music. It will undoubtedly stifle financial backing for other good ideas that come down the pike.
There won’t be a “next” Pandora if the present one doesn’t survive. But that’s fine with SoundExchange. The fewer independent players on the field, the more the RIAA gets to control what gets played and what we get to hear.
Of course, there’s even a darker alternative rationale to consider. In this version, SoundExchange and its masters ride in at the eleventh hour to offer a discounted royalty rate. All Pandora needs to do to survive is give up an equity position in the service to their saviors. That way the labels not only get to control the playlists (because only their artists will be available), they get to share in the service’s revenue going forward.
Tags: aching hands, eleventh hour, equity position, forfeitures, fourteenth street, independent players, music performance program, pandora, playlists, recording artists, royalty rate, standpoint, swoop, westergrenRelated posts
