Internet Radio Has Been 'Saved'

A deal has been reached which has given some certainty to the successful future of internet radio.

http://www.techcrunch.com/2009/07/07/pandora-and-other-internet-radio-has-officially-been-saved

"After two years of uncertainty, Pandora’s future has finally been secured.

For those not familiar with what was going on, basically the streaming rates for Internet radio were in danger of being raised to levels that would have made it very hard for companies like Pandora to stay afloat. But a resolution has been reached between webcasters, artists, and record labels, Pandora CTO Tom Conrad tells us.

“Pandora is finally on safe ground with a long-term agreement for survivable royalty rates,” Conrad says."

http://mashable.com/2009/07/07/internet-radio-deal

"Today, however, a new deal has been reached with the record labels that at least adds some clarity to the situation, albeit it may require some users to pay up for what was previously free. It calls for services like Pandora to pay either 25 percent of revenue, or a given amount per song, starting at $.08, whichever is higher. Smaller services (those with less than $1.25M in sales) will pay 12-14 percent of revenue in royalties.



While that represents a significant compromise from the $0.19 per song that rates were set to increase to next year, it will still require some changes on Pandora’s part. The company writes on their blog:

“The revised royalties are quite high – higher in fact than any other form of radio. As a consequence, we will have to make an adjustment that will affect about 10% of our users who are our heaviest listeners. Specifically, we are going to begin limiting listening to 40 hours per month on the free version of Pandora. In any given month, a listener who hits this limit can then opt for unlimited listening for the remainder of that month for just $0.99. In essence, we’re asking our heaviest users to put a dollar (well, almost a dollar) in the tip jar in any month in which they listen over 40 hours.”

This actually sounds incredibly reasonable. While Pandora founder Tim Westergren told The New York Times that “I don’t think anyone’s going to look at this and say, ‘I’m really happy, I got everything I want,’ ” the deal certainly gives Pandora and others a lot more breathing room. "