Internet Radio's "Last Stand"
Date : 2008 08 16 Category : Technology
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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.
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