I forgot to post a few days ago after first reading this Seattle Times article. Apparently the artist/label royalty fee for broadcasting a song over satellite radio is considerably higher than it is for conventional AM/FM radio, and even higher for playing a song over the web. This fee was just recently increased, much to the griping of web radio sites (which are businesses) like Pandora.
Things wouldn't be so bad, except that where satellite radio and conventional radio stations only broadcast one song at any given time, Pandora's "personalized radio" stations collectively play untold thousands of songs at any given time. Multiply that number of songs by that incremental fee increase and you can see that the total impact on these sites' ability to make a profit is critically large.
According to the article, Pandora has yet to post year-end marks out of the red, and before the fee hike, 2009 was projected to be the site's first profitable year. Now they may have to preemptively pull their own plug.
Pandora is one of the most successful of the free web radio sites out there, and if they can't withstand such a blow, it seems even more unlikely that less popular, similar sites such as Imeem, LastFM, and others, will be able to do so either.
What a colossal tragedy of copyright laws and greed. I hope this isn't the end of a great invention for discovering and sharing music.
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