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Copyright License Fees Drive Pandora Out of Canada
An anonymous reader writes "Online streaming music services such as Pandora are abandoning plans to launch in Canada, claiming licensing fees are too high: 'These rates ... are astronomical,' Tim Westergren, founder of California-based Pandora, wrote in an email to The Canadian Press. The agency that collects music royalties in Canada on behalf of record companies and performing artists wants to charge web-based music sites that stream to mobile devices the greater of two figures: 45 per cent of the site's gross revenues in Canada or 7.5-tenths of a cent for every song streamed. Meanwhile, record labels are blaming the lack of online music services in Canada on piracy: 'Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?' said Graham Henderson, president of the Canadian Recording Industry Association, which represents major record labels."
I'm happily streaming music from Rdio for $4.99/mo in Canada. I recommend it.
I don't buy music at all. Then again I haven't had the urge to listen to the crap they pump out on the radio either. Regardless, you'll find that most canucks are united on this issue, that if they're going to tax us on something. We've already paid our dues to download it. I suppose that whole cradle to the grave idea of paying for something can bite you in the ass...
Om, nomnomnom...
I've bought and paid for every single Nickleback album I have in my collection. Which is none.
Hi, I Boris. Hear fix bear, yes?
I buy blank CD-Rs, as do so many other people I know of. The cost of music is built in those. Once you have a stack of CD-Rs, you are no longer able to pirate music in Canada, as long as you only leech. It's the law. They made it. If they don't like it, tough.
"Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?" said Graham Henderson, president of the Canadian Recording Industry Association, which represents major record labels.
Somebody please tell Mr. Henderson to take his head out of his ass. The fact, as he well knows, is that Canadians already pay hefty fees. We already pay for recorded music at a rate far in excess of the cost of distribution. Radio stations already pay royalty fees. And everyone already pays a surcharge on recording media and players so that we can be legally entitled to generate copies for personal use.
How did this media surcharge come about? Because Mr. Henderson's own organization, the CRIA, successfully lobbied for it! That's right. They insisted that Canadians must pay a surcharge in order to legally record music. And so we have been doing, ever since the late 1990s.
Mr. Henderson finds this convenient to forget, but the rest of us have not forgotten. Even those of us who do no music copying at all have already paid in full for entitlement to copy.
Parity: What to do when the weekend comes.
What about labels who don't belong to the RIAA? It seems like this would be a great way for Pandora--especially Pandora, since they're pretty popular, and people know the name. Probably more so than any other free-to-stream radio--to stick it to the major labels. Just stream indie labels, those who don't belong to the CRIA, or labels who give their stuff away for free, or license it for free for this kind of thing.
Mr. Henderson is an idiot, no offense to the intellectually challenged out there. He, like everyone else in the music industry, has blinders on, and is clueless as to what the people with the money (ie, the CUSTOMERS) want. I'd love to get Pandora here. It was brilliant while it lasted, and nothing else I've tried has been able to beat it. And here's the irony for CRIA and their ilk: since Pandora got shut off in Canada, I've simply gone back to downloading. Yes, it's still legal here, as long as we're paying the blank media levies we do. And Mr. Henderson can kiss my shiny metal ass, because I'll NEVER pay a cent for music from artists he 'represents'. Not even to a 'legal' streaming service. Am I sad Pandora has given up on Canada? Yes, because I loved their system. And no, because it really doesn't affect me anymore. iTunes has Genius, which is pretty damn good these days, and since I can happily download tunes till I'm out of drive space.
"Apparatus dignosco occultus, satis non supernus."
Unless you're running a cost-free operation, with no employees, servers, or bandwidth, gross revenues are not equal to profit. Say that you have a low-cost operation and 70% of gross revenues are profit, though. That means that the recording industry wants a licensing fee of 2/3 of your profits? And even 70% is pretty good; it's not uncommon to be running profit margins that are 45% of revenues or less, in which case the recording industry would actually be taking all of your profit, plus possibly more.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
The agency that collects music royalties in Canada on behalf of record companies and performing artists wants to charge web-based music sites that stream to mobile devices the greater of two figures: 45 per cent of the site's gross revenues in Canada or 7.5-tenths of a cent for every song streamed. Meanwhile, record labels are blaming the lack of online music services in Canada on piracy: 'Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?
Now we all know who the real music pirates are.
Why would they do that? No one wants to lug around Yet Another Gadget. Although you can buy Pandora-equipped stereos, Pandora apps work just fine on smartphones. Even back in '07 Pandora partnered up with Sprint for firmware packages on Sprint phones so Sprint customers could use Pandora on their phone... nowadays you can use Pandora on just about any new smartphone. Especially since any smartphone worth its salt supports multitasking... why would you need a separate device?
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
Meanwhile, record labels are blaming the lack of online music services in Canada on piracy: 'Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?' said Graham Henderson, president of the Canadian Recording Industry Association, which represents major record labels."
Let's not forget that the CRIA is facing a six billion dollar lawsuit over commercial copyright infringement of over three hundred thousand songs. Regardless of your position on piracy, these guys have no leg whatsoever to stand on. If they're going to go after individuals for noncommercially sharing music, first they'd better clean up their own mess.
That Anonymous Coward guy is pretty annoying. Can we have the government censor him or something?
20 songs per hour, 52 weeks a year.
40*20*52 = 41600.
At the latter rate, that is 41600 * 0.0075 = $312.
And that's before Pandora's own expenses, such as bandwidth and payroll.
'Why would you spend a lot of money trying to build a service in Canada when Canadians take so much without paying for it?' said Graham Henderson, president of the Canadian Recording Industry Association...
Smart. Very smart. Rather than adopt a business model of offering affordable alternatives which most people would be happy to go with they're going to cut off their noses to spite their faces. They're happier to take 45% of nothing rather than a reasonable licensing fee of a reasonable price.
These people are so utterly daft that the mind absolutely boggles. Is it any wonder that they are incapable of adapting to a new technological age and prospering in that age? sigh...
The worst part is these individuals are getting rich from high salaries while the rapidly drive their industries into the toilet. And, once everything gets flushed away, these individuals will walk away with their vast savings and live happily ever after while they've demolished an industry and left it in the stone ages.
sigh...
Reminds me of the old email forward about the Canadian tax form:
A. How much did you make? _______
B. Send it to us.
The linked article mentions "the agency that collects music royalties in Canada," which should be understood to be a separate entity from the Canadian Recording Industry Association.
It's worth pointing out that there are several different agencies and several different sections of copyright law at work here. Purchasing a song for your own use and playing a song in a public place (or over internet radio) are two different things. I often see people in the US confusing the RIAA with ASCAP and vice versa, and a little clarity might be helpful.
So, in the US:
The RIAA represents distributors and publishers.
ASCAP and BMI represent songwriters and publishers, who are supposed to get a royalty when a piece of music is performed or played in a public place (or over internet radio).
SoundExchange represents performers or recording copyright owners, who are supposed to get a royalty when their recordings are played in a public place (or over internet radio).
So when all hell breaks loose and Justin Bieber does a cover of Michael Jackson's Billie Jean that is then streamed over Pandora, Soundexchange would collect royalties for Bieber's performance and ASCAP would collect royalties for Michael Jackson songwriting. If the original Billie Jean is streamed over Pandora, then Jackson would be (I believe) entitled to royalties as both the performer and the songwriter. These are performance royalties and are typically paid by the entity playing the recording (in this case Pandora).
When 100 trillion pre-teen girls try to buy a copy of Bieber's version of the song, they pay iTunes or WalMart or whatever, which is then supposed to pay the distributors. These are not performance royalties and are not administered by ASCAP, BMI, or SoundExchange. When you, out of morbid curiosity, illegally download the track, the RIAA will sue you to the tune of $xx,000,000 on behalf of the distributors.
I say this because it's important to know that even though these organizations are related, they are not the same. Also, performance royalties in most cases actually make it to the artist, so I'm hesitant to hate on ASCAP (I'm a member) although sometimes I wish they would just chill out a little bit.
I used to buy a lot more music on iTunes when it was 99 cents but now, with variable pricing, virtually all songs on the Canadian iTunes are 1.29 CAD each so I have stopped buying so much.
What really sucks is you can only vote with your wallet by not paying, in which case they just blame reduced sales on piracy.
I wish there was a way to put your money where your mouth is and have a "Buy At $X", so you could refuse the song at $1.29 but make a binding offer to buy it at $0.99 that month (there would need to be some kind of time limit to the offer). That would create realistic metrics of what people are willing to pay and give the seller the opportunity to accept the offers. You could calculate pricing elasticity a lot more accurately that way and maximize profit (you CAN make more money by selling for less, especially when you have infinite supply.. for some reason the music industry doesn't get this).
"If you are going through hell, keep going." - Winston Churchill
Canada is a great country. We have lots of space, natural resources, and clean water. We have lots of land to work and play in. We have a banking system that didn't need massive bailouts. We are the number one supplier of Oil to the US, and supplied Uranium to create the first Atomic bomb. We are an energy superpower and the USA is addicted to our oil. Canada is only getting more powerful.
You are correct though that Canada is not a great contry, it is the greatest country in the world. Canada is safe, beautiful, clean, and rich.
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Money is tight for companies like Pandora, which is why they should go in to the hardware business
Wait... You want Pandora to build a box? Have you learned nothing from mythology?
When our name is on the back of your car, we're behind you all the way!
If it is anything like in the UK, the money they get for air play (PRS royalties in the UK) is the only form of income a music artist can get that the record companies cant shit all over and hoover up for themselves. For most artists who are kept by their record deals in crippling debt this is sometimes their only source of income and most actually have to keep jobs on the side just to pay the bills. Very few bands actually make a living out of music, even reasonably famous ones you would have suspected otherwise.
Obviously its down to the big companies to then turn to the public with press releases like this and make it look like the big bad recording artists are greedy with their only source of income and that if they keep the pressure up and bend the truth a little, they can often cut out a huge percent of this unnecessary cost of paying the actual creators of the song and not just renting it from their owners, the record Label. Youtube managed this by putting public pressure on them by blocking music videos in the UK till they agreed to let them have it for almost free.
I must add that a friend of mine who is a professional recording artist is my source for this, and is therefore far from unbiased.