Last month we reported that SoundExchange had killed off Internet radio by upping royalties to levels that cannot be sustained by any company. Pandora, the largest and most popular of current Internet radio companies, admitted that day that they are most likely going to have to shut down if the royalty charges are not lowered.
Yesterday we received an email from a Pandora representative which was very interesting and I will post in its entirety later in this article. In the email, the rep says that the RIAA and SoundExchange have come to their senses and are ready to agree to lower royalties to levels where an Internet company can survive and the trade groups can make the profit they want. It appears there is another roadblock however, one being brought forward by the traditional radio broadcasters, most notably Clear Channel Communications. The entire email as we received it:
Hi, it’s Tim from Pandora;
After a yearlong negotiation, Pandora, SoundExchange and the RIAA are finally optimistic about reaching an agreement on royalties that would save Pandora and Internet radio. But just as we’ve gotten close, large traditional broadcast radio companies have launched a covert lobbying campaign to sabotage our progress.
Yesterday, Congressman Jay Inslee, and several co-sponsors, introduced legislation to give us the extra time we need but the National Association of Broadcasters (NAB), which represents radio broadcasters such as Clear Channel, has begun intensively pressuring lawmakers to kill the bill. We have just days to keep this from collapsing.
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