Future of web radio threatened by rising rates

Reading in both GigaOM and today's Guardian, I'm unnerved to hear about the rising royalty rates charged to companies broadcasting music in the US. The US Copyright Royalty Board have said royalty rates should increase every year until 2010, when it will cost businesses about $0.0019 per performance. Until recently it was just 7/100th of a penny.

Sounds like a drop in the ocean, but according to the co-founder of internet radio company Pandora, Tim Westergren, it signals the beginning of the end. He was quoted in the Wall Street Journal saying "With these rates, there's no Pandora."

The new rules may also have a negative effect on WebTwitcher's favourite Last.FM. Hopefully not - it will be interesting to see how this innovative start up responds to the changing business environment.


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