Before Pandora became a geotarded service it was one of my most favourites services that I had running more often that winAMP. Along with Last.fm the Pandora service was one of the best ways to find out about new music and musicians. While Last.fm is still available via their web site and is now a property of CBS Pandora on the other hand was forced to literally cut their listening base by more than half because of incredibly restrictive and expensive copyright agreements by foreign RIAA look a like organizations claiming to be protecting the rights of the musicians.

Of course these are the self same musicians who will be the first to tell you that them money they make from their recordings is next to nil. The vast majority of their money comes from concert tours and other merchandising deals that they can cut – especially once that doesn’t include the so-called agencies claiming to protect their interests. The fact is that these agencies much like SoundExchange couldn’t care less about the artists or that the money they are suppose to be collecting for said artists never actually reaches them in most cases.

Now thought this argument about Internet webcasters is coming to a head along with incredibly large bills as well as totally unreasonable yearly fees that in some cases can equal 200 to 300 percent of their revenues. This in effects puts a bullet right between the eyes of services like Pandora while at the same time terrestrial radio stations have to pay nothing while doing exactly the same thing – serving up music to people. Unlike terrestrial radio though services like Pandora and Last.fm do one more very important thing besides letting you find new musicians – it lets you actually buy their music with very little trouble. As Candace from Geek Media points out

What really gets to me about this issue is, Pandora actually helps the artist. Traditional radio does not give you the option to buy the music you hear. You have to find that music. Traditional radio also only plays certain songs by an artist. Places similar to Pandora (like last.fm) give you the chance to hear songs you would never hear on the radio and, artists you would never hear on the radio.

I’ve bought plenty of music thanks to Pandora and last.fm . I’ve also discovered plenty of new artists thanks to those two sites. I can not say the same for traditional radio. Yet, Pandora and stations like Pandora are seemingly punished for introducing people to good music, and helping the artists. Something isn’t right here.

Right now we are standing at probably the most important cusp for internet music and webcasters like Pandora. As Peter Whoriskey wrote today on WashingtonPost.com:

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.

As for Pandora, its royalty fees this year will amount to 70 percent of its projected revenue of $25 million, Westergren said, a level that could doom it and other Web radio outfits.

Don’t get me wrong artists deserve to be paid for their creative work but organizations like the RIAA and SoundExchange aren’t at all about protecting the artist’s rights or collecting monies that might be due them. For them it is all about making themselves rich off of the backs of the artists who they say they are representing. Even taking a look at the board of directors on the SoundExchange organization one doesn’t see a single recording artist but one does find a whole bunch of recording label executives. Labels who are very quickly finding out that they are a in a business whose very existence is being called into question.

The problem is that unless there are some late ditch efforts on behalf of webcasters like Pandora and even smaller providers they will find themselves being driven out of business. In the end though we are going to be the losers because as more and more legitimate ways to discover new music and easy ways to purchase that music in ways that doesn’t include the record label. What will happen is that there will be more and more piracy of music regardless of the efforts of crooked organizations like the RIAA – and that you can take to the bank.