The robot-powered music streaming service Pandora will close its UK operation next week. The company blames high royalty demands from the two main UK collection agencies. The site will continue to stream to what it recognizes are US-based IP addresses, but will block connections to UK addresses from January 15.

Pandora left the UK side running after it closed the rest of its non-US operations in July.

In an email to users, Pandora founder Tim Westergren wrote:

"After over a year of trying, this has proved impossible. Both the PPL (which represents the record labels) and the MCPS/PRS Alliance (which represents music publishers) have demanded per track performance minima rates which are far too high to allow ad supported radio to operate and so, hugely disappointing and depressing to us as it is, we have to block the last territory outside of the US."

"We have been told to sign these totally unworkable license rates or switch off, non-negotiable...so that is what we are doing. Streaming illegally is just not in our DNA, and we have to take the threats of legal action seriously."

Unlike Web 2.0 poster children such as YouTube, Pandora had tried to work with copyright holders from the outset.

Yet Pandora has struggled to create a sustainable business, or find capital willing to sustain the business until it finds one. Without revenue, it's hard to pay the smallest bill. ®