Interesting Article involving Sirius/XM from slashdot

Found this on Slashdot

We've been discussing the plight of Internet radio for some time, as the Copyright Royalty Board imposed royalties that industry observers predicted would prove lethal to the nascent industry. We discussed Web radio's day of silence in protest, which won the industry a reprieve, and the futile efforts to find relief in Congress. Now it's looking as if the last act is indeed close. Death Metal Maniac sends along this Washington Post story with extensive quotes from Pandora CEO Tim Westergren, who said: "The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we're doing is wasting money... We're funded by venture capital. They're not going to chase a company whose business model has been broken." The article estimates that XM Satellite Radio will pay "about 1.6 cents per hour per listener when the new rates are fully adapted in 2010. By contrast, Web radio outlets will pay 2.91 cents per hour per listener." That's 70% of projected revenue for Pandora; smaller players estimate the hit at 100% to 300% of revenue

http://yro.slashdot.org/article.pl?sid=08/08/16/1929217
http://www.washingtonpost.com/wp-dyn...503367_pf.html

It's kind of sad to see something that like that, for a couple of reasons.

1.) Pandora is really cool and a refreshing way to "explore" music.
2.) Terrestrial radio is still getting away with murder by not having to pay royalties.

That being said, its leaving the door open for Sirius XM, and that hole, combined with our expansion in the cell phone lately has got me pretty excited.

I really like Pandora, it's sad to see them having to pay so much more in royalties than Satellite radio/terrestial radio.

The thing that gets me is this:

Quote:

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SoundExchange, the organization that represents performers and record companies, said it supports the higher royalties for Internet radio because musicians deserve a bigger cut of Internet radio profits.

"Our artists and copyright owners deserve to be fairly compensated for the blood and sweat that forms the core product of these businesses," said Mike Huppe, general counsel for SoundExchange.

---

I have a piece of information for you, SoundExchange, you don't get internet radio royalties if there are no internet radio stations.

And if internet radio stations can't make any money, then there won't be any internet radio stations.

I still think there will be internet radio stations, but they will probably become subscription based, as advertising probably won't be enough to pay the royalties.

I wonder why they seem more on getting royalties for internet radio than terrestial radio, if they got internet, satellite, and terrestial radio paying the same amount as satellite radio, they'll be making just as much money as making internet radio pay twice as much as satellite radio.

Come on guys while your mouths are saying poo hoo for Pandora your minds are saying yes thats right satellite radio is king. I said this would happen why because they said it would happen (Pandora and all the internet radio companies), if the rates got to be much more then what they were paying. Well they did, and well it is happening. That is one of the reasons I have said internet will never be real competetion for satellite.

Somehow I have my doubts about how much "artists" get out of the royality payments. I really don't have any information & maybe I overly cynical but I'll just bet that "copyright holders" (record companies and managers?) get rich off of this and artists get just pennies if anything at all.

Please correct me if I am wrong here, I don't know. I am just fairly cynical about this. The music industry has a long, bad history of everyone involved in a recording getting their fair payment except the artists.