Royalty Rates May Kill Internet Radio Site

One of America's most popular online radio sites may pull the plug without a new deal on royalty rates, the Washington Post reports. Pandora attracts 1 million listeners a day to create personalized radio stations, but also pays 70% of its revenue in per-song royalties—a fee traditional radio has avoided. “We're approaching a pull-the-plug kind of decision,” said Pandora founder Tim Westergren.

Last year a federal panel doubled the royalty web broadcasters must pay per-song, per-listener. Now a California lawmaker aims to broker a deal with SoundExchange, the music industry's royalty collector, but progress is slow. Westergren called it "a last stand for webcasting.” A SoundExchange rep countered that artists must be "compensated for the blood and sweat that forms the core product of these businesses." (More Internet radio stories.)