Internet Radio's "Last Stand"

We've been discussing the plight of Internet radio for some time, as the Copyright Royalty Board imposed royalties that industry observers predicted would prove lethal to the nascent industry. We discussed Web radio's day of silence in protest, which won the industry a reprieve, and the futile efforts to find relief in Congress. Now it's looking as if the last act is indeed close. Death Metal Maniac sends along this Washington Post story with extensive quotes from Pandora CEO Tim Westergren, who said: "The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we're doing is wasting money... We're funded by venture capital. They're not going to chase a company whose business model has been broken." The article estimates that XM Satellite Radio will pay "about 1.6 cents per hour per listener when the new rates are fully adapted in 2010. By contrast, Web radio outlets will pay 2.91 cents per hour per listener." That's 70% of projected revenue for Pandora; smaller players estimate the hit at 100% to 300% of revenue.

Comments

Even satellite radio can't survive at their rates!

[Newer Guy]

Do the math. .016/hour times 24 hours in a day = 38.4 cents a day. 38.4 cents a day times 30 days equals $11.52 a month. XM only gets 12.99 a month for their fees-so the rights are something like 94% of their income. They simply can't make any money with what's left! The only thing I can think is that they have some kind of formula that estimates the average hours listened to by a subscriber-remember thats'a no way to actually know what listeners are listening to and for how long they're listening as well (like broadcast radio, satellite is a one way broadcast technology). I suppose the new Arbitron people meter will make things easier for them, as it also will survey satellite radio stations that are encoded.

Remember that Internet radio's rates are almost TWICE as high as satellite's. The only thing I can come up with is that SoundExchange WANTS to put Internet radio out of business for some reason-that's the reason they're setting rates as high as they are!

Re:A small correction

[Iloinen Lohikrme]

True. I have to say that I really don't care anymore about Pandora or other Internet radio stations after I found Deezer. The thing I liked about both Pandora and Last.fm was that I could listen songs freely which lead into a habit of skipping songs or creating a new radio station just to listen the song again. I think that many people used Pandora and Last.fm this way. Now with Deezer I have the freedom to play whatever songs whenever I like to, that's the way I like it, so there is no need for Pandora or Last.fm anymore for me. In addition now Deezer caters decent radio stations based on more or less on their own selection. Pandora's and Last.fm's idea about having smart radio stations wasn't bad, but having your own customized playlists allow more freedom to you and pre-selected radio stations offer better and more coherent content than any smart selection.

It looks like they've already gotten started

[ethergear]

http://p2p-radio.sourceforge.net/