Pandora Radio to go Tits Up

Popular internet radio site Pandora Radio may be going tits up soon according to the Washington Post and other sources. SoundExchange, the licensing and knee-capping fee collection arm of of the recording industry for broadcasting and performances, instituted a massive, retroactive rate hike last year, and time is about to run out for web broadcasters like Pandora.

The fee structure being imposed on webcasters is nothing short of punitive, at about 2.91 cents per hour per listener compared to 1.6 for satellite radio and 0.0 for regular radio. You read that right—due to historical accident and no small amount of lobbying by broadcasters, regular radio stations pay nothing to broadcast music. Of course, SoundExchange is trying to change that too.

Normally we cheer failure, especially when it happens to companies with 'Flash based application software' and '100% advertising supported' in the business plan. While running around gleefully flinging schadenfreude and insults like verbal feces is fun, in this case we feel somewhat bad. Pandora was pretty a cool service. An outgrowth of the Music Genome Project, Pandora used 'Music DNA' to identify elements in music. So if you tell it you like, say, Kenny G, it will look at its database of music and determine that you might like other music with 'acoustic rhythm piano, acoustic sonority, major key tonality', and other asshattery. It would then suggest and play other music with those elements. Enjoy your Yanni.

It is(was?) an innovative service and the suggestion feature even worked occasionally, which is why it's such a shame that it will be going tits up. The new fee structure is designed to drive webcasters out of business, which is just how the record companies want it. Web radio competes with tradiotional revenue sources, and it's hard to protect digitally streamed content from copying. Apparently the labels haven't figured out yet that once any one warez kiddie has a copy of your stuff, everyone does. It appears they would rather put web radio out of business than figure out how to make money on it, part of their ongoing strategy of litigation in lieu of a viable business model.

Perhaps the biggest failure in this whole sorry mess is intellectual property law as a whole. We have here an instance of entrenched interests being able to sue and bully a legitimate new technology out of existence. This is the exact opposite of the intended purpose of intellectual property law, which is to encourage and reward innovation and creativity. It's a lot like the nascent auto industry being sued into penury by the horse and buggy cartel. But fear not, failure fans. The record companies will be getting their own Tits Up obituary real soon.