Ridiculous licensing demands bring the excellent customisable streaming radio station to its knees.
And you thought Sony BMG had already wrapped up the Music Industry Dunce of the Week Award….
Yes, it beggars belief, but today the PPL (which represents the record labels) and the MCPS/PRS Alliance (which represents music publishers) have somehow managed to snatch the prize for actions which are far more reckless, self damaging and downright tight-fisted long term than BMG’s daft attempt to package MP3s.
In one of the most poignant and logical letters I have had the pleasure to read at TrustedReviews, Tim Westergren – founder of Pandora, the brilliant, free, ‘intelligent’ Internet streaming radio station – explained that it will close the service to all UK users on 15 January due to impossibly high new licensing rights demanded from the PPL and the MCPS/PRS Alliance.
If you’ll excuse the long quote, I think Tim explains the scenario best:
”hi, it’s Tim,
This is an email I hoped I would never have to send.
As you probably know, in July of 2007 we had to block usage of Pandora outside the US because of the lack of a viable license structure for Internet radio streaming in other countries. It was a terrible day. We did however hold out some hope that a solution might exist for the UK, so we left it unblocked as we worked diligently with the rights organizations to negotiate an economically workable license fee. 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.
It continues to astound me and the rest of the team here that the industry is not working more constructively to support the growth of services that introduce listeners to new music and that are totally supportive of paying fair royalties to the creators of music. I don’t often say such things, but the course being charted by the labels and publishers and their representative organizations is nothing short of disastrous for artists whom they purport to represent – and by that I mean both well known and indie artists. The only consequence of failing to support companies like Pandora that are attempting to build a sustainable radio business for the future will be the continued explosion of piracy, the continued constriction of opportunities for working musicians, and a worsening drought of new music for fans. As a former working musician myself, I find it very troubling.
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. Lest you think this is solely an international problem, you should know that we are also fighting for our survival here in the US, in the face of a crushing increase in web radio royalty rates, which if left unchanged, would mean the end of Pandora…
…Pandora will stop streaming to the UK as of January 15th, 2008.
Again, on behalf of all of us at Pandora, I’m very, very sorry.
So from the stupidest quote of the week to the smartest. Of course this news also expands beyond Pandora to any streaming music station so it looks like we’ll have to brace ourselves for more closures soon.