Source: http://www.michaelrobertson.com/arch...?minute_id=298The economics don't lie. Experienced radio man Bob Bellin says, "No start up webcasting business can give up more than 25% of their revenue and make a profit." Bill Goldsmith of Radio Paradise says that long term viability requires a payment of no more than 10-12% of total revenues for both publishers and record label royalties. The new rates, while lower, are nowhere close to being sustainable. While I've used Pandora as a reference point to illustrate the situation, the same could be written about Slacker, Last.FM, or any webcasting company. Net radio is going to die a slow death in the United States.
I can't tell if this guy is being reasonable or overly pessimistic. Anyone more familiar with Pandora's business care to comment?