I love Pandora, or at least I did until they were forced to geotard their music service to US web users – the rest of the world was basically told to go fuck yourself. The thing is I would love to be able to still use Pandora – hell I’d be more than willing to pay a yearly subscription as long as I could use PayPal.
But unfortunately the music industry and their greedy beyond belief trade groups in any of the countries Pandora might want to branch into are demanding outrageous royalty payments that would literally bankrupt the company. Even in light of these totally unreasonable demand Pandora is still able to raise money.
Much like the $35 million in new venture capital that Pandora announced this morning that they have just raised from unnamed VC firms. The only condition of this deal going through was that Pandora is required as part of the agreement to cough up 25% of their yearly revenue to the music industries lapdogs.
All of that changed earlier this week, when Pandora and other webcasters reached a new agreement with the recording industry. Under terms of the new deal, large players like Pandora will pay out either 25% of revenue or a per song fee that will increase each year (whichever is higher). Still sounds onerous compared to terrestrial radio – which pays zilch – but is still considered a big win for Pandora.
Pandora also will begin charging a nominal fee to those who use its service more than 40 hours per week.
Source: PE Hub
Even with this new agreement in place Pandora is still geotarded, even to those willing to pay a yearly subscription fee. So given that the US market place is no slouch how is it they can cut off the rest of world at the knees and still be able to get extra funding of $35 million.
Sorry but this kind of deal makes absolutely no sense. It is an agreement that doesn’t just apply to big music services like Pandora but to all online audio streaming (individual or company). As much as I can understand why Pandora might feel that it needs to acquiesce like this I think that this agreement is going to come back and bit not just them on the ass but all audio streaming services out there.
This is nothing short of blackmail and nothing that all these lapdog trade groups say can change that obvious fact.
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