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Pandora's new box

Becky Hogge

Published 17 January 2008

The future of music radio lies online, once there's a way to pay artists fairly

My favourite Christmas present last year was a pink leather radio, DAB-enabled, to replace my old (and broken) analogue one. The reason I love it so much has little to do with the extra radio stations it lets me tune in to. Yes, it's fun to listen to the World Service all day, and my growing endearment with 6 Music and Chill FM at least reassures me it's time I turned 30. But I love my new radio, I'm ashamed to say, because it's pink.

When I think about the future of radio, I don't think about DAB. Personalised internet radio is far more exciting. If you've never experienced it before, imagine this: you go to a website, and punch in the names of a few of your favourite musicians. Then, based on an "if you like that you'll love this" technology, it plays you what it thinks you want to hear. You can train it, either by rating the songs it plays you, or by introducing it to your MP3 collection. The result is unadulterated audio pleasure, without a Smashie or Nicey in sight.

Those to whom this sounds too good to be true will not be surprised that personalised internet radio has recently found itself in legal hot water. On 15 January, Pandora, a US-based personalised internet radio station, closed down its service to UK customers, having been unable to negotiate how to pay musicians a proportion of its profits.

In the analogue world, organisations called collecting societies seek royalties on behalf of the artists whose music is played on air, and distribute it accordingly. But the idea of as many radio stations as you have listeners, each playing a different song 24 hours a day, prompted the collecting societies to ask Pandora to pay more money than it could afford, and in the end everybody lost.

Last.fm, the UK's personalised internet radio station, which last year sold for a reported £142m, is confident that it will continue to be able to offer its service in the UK. A spokesperson for the company admitted that royalty negotiation was a "tricky business, in constant flux" and that the process of clearing rights was over-complex, given the potential benefits the Last.fm service can offer musicians. Radio has always been a way to expose listeners to new music they might like to buy, and personalised internet radio does this more efficiently and on a much larger scale.

Pandora's ex-customers in the UK will be wondering why the service they want can't be catered for by the recording industry. And they are not alone - for what are the millions of illicit peer-to-peer file-sharers, but a huge potential market? Internet users are showing the industry how they want their music in the digital age.

Licensing songs for broadcast on analogue radio probably looked incredibly complicated before anybody started doing it. Isn't it time that the industry started responding to internet music fans, rather than fighting them?

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2 comments from readers

cthornett
17 January 2008 at 15:33

Yes, many UK Pandora users are rallying round and signing a petition to change the excessive royalty fees for Internet radio:

http://petitions.pm.gov.uk/SaveNetRadioUK/

Pandora was being asked to pay between 80 to 94% of its advertising gross revenues by the MCPS-PRS and the PPL, which was just unworkable.

Internet radio isn't a mature industry yet, it's still finding its way, but personalised or custom radio is gaining in popularity, as people want to listen to and discover music how they like.

If you start doing comparisons with commericial radio the maths reflect the problem. Commercial radio expects to make about 2.57p per listener an hour with its 31m weekly listeners, while services like Pandora are being expected to pay 2.434p per listener per hour, when they have an estimated 150,000 to 200,000 users in the UK.

Sure, monetizing such services isn't the PPL or Alliance's concern, but with the fees set at their current rate, they're forcing services to pull out of this country or come up with workarounds (Last.fm has deals direct with the major record labels to cover the major artists and pays indy artists through aggregators like the IODA - it's certainly 'tricky' and means not every artist gets paid and it restricts who they can play). Of course, there are also a growing band of music services that don't pay at all or say they're legal because they pay American royalty bodies, while continuing to stream into the UK. Internet radio is a wild west that needs to be tamed to allow music services to pay a fair royalty for the current state of the market. Supporting this new market will benefit artists - particularly independent ones - the economy and offer the kind of service consumers obviously enjoy.

Personally, I hope common sense and economic sense prevails.

KG33
17 January 2008 at 17:05

As an alternative to Pandora, check out www.Jango.com. I've been using it since November -- it offers the same capability to create personal radio stations REALLY easily, but also has a real active social network.

I found that Pandora lacked the activity and profile pix/personal info that I found with Jango users. Pretty cool, you actually see the faces of other users in our Jango music player that are tuning into your own stations, or listening to similar artists.

I also grabbed their widget to stream through my MySpace page. Check it out at http://jukebox.jango.com. Has an animated filmstrip of your artists...which seems to be a hit with the ladies online!

Cheers - KG

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About the writer

Becky Hogge

Formerly technology director of award-winning current affairs website openDemocracy.net, Becky Hogge is Executive Director of the Open Rights Group, a grassroots digital civil liberties campaigning organisation.

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