Music fees a box of trouble for Pandora

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Pandora, the Internet radio service that allows listeners to customize musical selections to their own tastes, is “approaching a pull-the-plug kind of decision,” founder Tim Westergren tells the Washington Post. Under the royalty fee structure imposed on Web radio stations last year, Pandora projects that 70 percent of its total projected revenues of $25 million will go to royalty payments. The Post’s TechCrunch blogger Michael Arrington, an early advocate for Pandora, doesn’t see the music industry backing down from their “absurd” position on webcasting royalties, and says perhaps Pandora should be sacrificed for the larger good of eventually bringing the music labels to their knees. “For now the labels want to squeeze more revenue out of Pandora and others,” Arrington writes. “But when these companies start to go under and the bird in the hand disappears, they may regret their overly aggressive negotiating stance. It’s time for the labels to die, and anything that cuts off another revenue stream is at least partially good.”

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