An interesting post on Broadstuff about Pandora, the web-radio service whose extremely high royalty payments may force it out of business:
it’s clear that Pandora and its ilk will live – it’s far too good to lose – [so] it will just go to the P2P freenet if this practice continues, thus hurting the Industry even more in the medium term. If ever there is a case study of a short sighted tactic to shoot yourself in the foot strategically, this is it.
The problem is that Pandora doesn’t pay the same royalties as other forms of radio, as the Washington Post reports:
Last year, an obscure federal panel ordered a doubling of the per-song performance royalty that Web radio stations pay to performers and record companies.
Traditional radio, by contrast, pays no such fee. Satellite radio pays a fee but at a less onerous rate, at least by some measures.