Beloved Internet radio station Pandora may turn off its digital signal according to an announcement today that the company would "likely shut down rather than continue to pay exorbitant fees to play music to listeners of its massively popular service."
The Wall Street Journal reports that an obscure federal panel last year ordered a doubling of the per-song performance royalty that Web radio stations pay to performers and record companies. Pandora says they’re already paying 70% of their $25 million in yearly revenues at the current rate of royalty fees, and it is driving them out of business.
The new legislation for online music royalties doesn't play fair. According to a TechCrunch article, "Radio stations pay different rates depending on how they broadcast music. Terrestrial stations (normal FM/AM stations) pay nothing, a tribute to their powerful corporate parents with limitless lobbying budgets. Satellite stations pay approximately 1.6 cents per hour per listener. By 2010, Pandora and other Internet radio stations, which have few lobbying resources, must pay 2.91 cents."
Speculation about the affects of politics aside, the loss of Pandora is huge and not only for those of us wanting to rock out to customizable, non-commercial, free radio at work. Musicians will take a hit, too. By nature of being an Internet company, Pandora is unaffected by the barriers of geography, and thus local, unsigned artists had an avenue to access untapped audiences.
Here's an example: If people in Australia created a radio station for music that sounds like Silverchair, Pandora might introduce them to a band called focuspoint from Seattle.
From a lister perspective, Pandora's value is unprecedented. Competitors have yet to match its vast library, large user base and intelligent music analysis system, "The Music Genome Project," which helps expose people to "new music coming from studios, stadiums and garages..."
With that, go forth and rock out on Pandora. Find new music... while you can.