Music labels strike a deal over internet radio

Good news has arrived to the millions of streaming music fans of the world. Internet radio that was once almost killed off by the record labels because of new royalty fees, has been saved.

In 2007 the federal royalty board ruled that streaming music websites, such as Pandora, need to pay a fee for each song played. Starting next year the rate would have jumped to 19 cents a song and that would have severely hurt the streaming services.

"Webcasters with significant advertising revenue, like Pandora or Slacker, will pay the greater of 25 percent of revenue or a fee each time a listener hears a song, starting at .08 cent for songs streamed in 2006 and increasing to .14 cent in 2015. Pandora had $19 million in revenue last year and expects that to rise to $40 million this year"

Record labels are increasingly seeing the benefit of the streaming sites that allow you to alter your listening habits. Because of this, many users discover new bands or songs that they like and will then likely purchase more music. If record labels would have killed off internet radio they would have lost even more money because of the loss of music purchases.

If you're one of the millions of music streamers you do not have to worry about your favorite service being taken offline by the industry.

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19 Comments

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.08 cent and .14 cent?

Um, wouldn't that mean only 8% of one cent, or 14% of one cent?

14 cents =/= .14 cent

If it really is .14 cent, then I'm really surprised.

They've already killed Pandora for me, seeing as we can't get it in the UK anymore. Not without playing silly buggers with proxies, anyway.

andrewbares said,
I was a lil lost too. But it's not an article that's meant to be skimmed through ;)

I didn't skim it. But it's quite confusing... It feels like we're missing something...

lol what a load of garbage. Stepping backwards in time for music industry, shame really they are so ignorant to modern standards.

Pandora's new deal is 40 hours a month free, 99 cents a month for over 40 hours or $36 a year for unlimited and 192kbps quality.

NO it says that they "would have paid" more if the new fees were to be implemented. It will remain closer to the 25% instead of increasing more and more over time.

mrmomoman said,
NO it says that they "would have paid" more if the new fees were to be implemented. It will remain closer to the 25% instead of increasing more and more over time.

Yeah, the article feels half finished...

I'm glad that whatever happened happened though. The music industry is one grubby industry it seems...