Feeds

Pandora prepares to join titsup.com club

Web radio outfit struggling to cover royalties

High performance access to file storage

This weekend saw a cry for help from personalised web radio outfit Pandora. It blubbed that music industry royalties are too high for it to survive on meagre web 2.0 advertising revenues.

In a Washington Post confessional, the firm's founder and CEO Tim Westergren said: "We're approaching a pull-the-plug kind of decision. This is like a last stand for webcasting."

The fees Pandora must pay collecting societies for creating and streaming custom radio stations will swallow 70 per cent of its projected $25m advertising revenues.

Westergren blames the decision of the Library of Congress' Copyright Royalty Board last year to set rates for custom services such as his - which effectively offer a virtual jukebox - significantly higher than traditional or satellite broadcasting. The Board decided to raise royalties for webcasts from eight one-hundredths of a cent to 19 one-hundredths of a cent per song by 2010.

Switch-off in the US would mark a dismal end to a rapid worldwide retreat by Pandora. In July 2007 it went dark in all non-US and UK territories after failing to reach payment agreements with collecting societies. That was swiftly followed in January by a pull-out from the UK, again citing royalty woes.

Unlike its Blighty-based rival Last.fm, Pandora's venture capitalist backers have yet to see a return on their repeated investments with a big media buyout. Last.fm was swallowed by the CBS conglomerate for $280m last year. Although it has its own licensing problems, the credibility and long-term stability of its sugar daddy has helped the site prosper.

Pandora's failure to attract a similar cash-rich buyer now seems terminal, despite its popularity with users. Attempts are being made to win a stay of execution by renegotiating the royalty rate, but Westergren seems resigned. "We're funded by venture capital," he said. "They're not going to chase a company whose business model has been broken. So if it doesn't feel like its headed towards a solution, we're done."

Pandora is by no means alone in its inability to profit from "free" content. Even Google, the undisputed champ of web advertising, runs YouTube as a loss leader; a net cost useful only for attracting search traffic. ®

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.