Streaming Wars: The Great Switch Off

Just got this email from Pandora (the online streaming intelligent ‘learning’ radio site)

hi, it’s Tim,

This is an email I hoped I would never have to send.

As you probably know, in July of 2007 we had to block usage of Pandora outside the
U.S. because of the lack of a viable license structure for Internet radio streaming
in other countries. It was a terrible day. We did however hold out some hope that a
solution might exist for the UK, so we left it unblocked as we worked diligently
with the rights organizations to negotiate an economically workable license fee.
After over a year of trying, this has proved impossible. Both the PPL (which
represents the record labels) and the MCPS/PRS Alliance (which represents music
publishers) have demanded per track performance minima rates which are far too high
to allow ad supported radio to operate and so, hugely disappointing and depressing
to us as it is, we have to block the last territory outside of the US.

Based on your email address, we believe you may be listening from the UK. If you are
in fact listening from the U.S., please disregard this email. It continues to astound me and the rest of the team here that the industry is not
working more constructively to support the growth of services that introduce
listeners to new music and that are totally supportive of paying fair royalties to
the creators of music. I don’t often say such things, but the course being charted
by the labels and publishers and their representative organizations is nothing short
of disastrous for artists whom they purport to represent – and by that I mean both
well known and indie artists. The only consequence of failing to support companies
like Pandora that are attempting to build a sustainable radio business for the
future will be the continued explosion of piracy, the continued constriction of
opportunities for working musicians, and a worsening drought of new music for fans.
As a former working musician myself, I find it very troubling.

We have been told to sign these totally unworkable license rates or switch off,
non-negotiable…so that is what we are doing. Streaming illegally is just not in
our DNA, and we have to take the threats of legal action seriously. Lest you think
this is solely an international problem, you should know that we are also fighting
for our survival here in the US, in the face of a crushing increase in web radio
royalty rates, which if left unchanged, would mean the end of Pandora.

We know what an epicenter of musical creativity and fan support the UK has always
been, which makes the prospect of not being able to launch there and having to block
our first listeners all the more upsetting for us.

We know there is a lot of support from listeners and artists in the UK for Pandora
and remain hopeful that at some point we’ll get beyond this. We’re going to keep
fighting for a fair and workable rate structure that will allow us to bring Pandora
back to you. We’ll be sure to let you know if Pandora becomes available in the UK.
There may well come a day when we need to make a direct appeal for your support to
move for governmental intervention as we have in the US. In the meantime, we have no
choice but to turn off service to the UK.

Pandora will stop streaming to the UK as of January 15th, 2008.

Again, on behalf of all of us at Pandora, I’m very, very sorry.

-Tim Westergren (Pandora founder)

This is not an unusual occurence – If I go to MTV the video streams are blocked cos I’m from the UK, and it seems Pandora is following suit. In this digital age the record companies, industry bodies such as BPI/RIAA and collection companies such as PPL and MCPS-PRS seem to want to put the genie into the bottle. They would love to reinstall the cultural apartheid that existed before the internet with ‘zones’ (like DVD, I’m sure if they could do that with DRM they would) and country-based markets, and restrictive practices and a legal minefield that make streaming, podcasting et al difficult, rather that embracing the cross-country and cross-market opportunities that exist today, and accepting that internet streaming does not have the same commercial clout than broadcast radio and is not broadcasting in the traditional sense.

Really they are shooting themselves in the foot, because UK artists and music won’t get the opportunities overseas and vice versa because blocking the cross-pollination via demanding high royalty rates – which tbh are mostly eaten up by the agencies themselves – will prove bad and uncreative for the traditional music industry; and those who want to create online will move to CC and self-publishing models, because if more podcasts and streams go non-MCPS/PRS/RIAA it won’t be viable to join those associations – in fact it’ll be commercial death, at least on the Net. But it’s sad because Pandora is a great service and I heard some great music via their intelligent suggestion system, and it’s going to be only the big companies like Yahoo and MSN who will be able to afford those rates, so the whole of internet radio will become like mainstream podcasting a reflection of the takeover by large conglomerates like ClearChannel….large, bloated and boringly commercial, promoting the latest bland urban cack like Souljah Boy and Umbrella rather than anything specifically niche or related to these local markets….

Related, I heard a stupid conversation last night on Radio 3 proposing that intellectual thought would ‘go global’ in 2008, more stupid inane middle-class chatter from the likes of Jonathan Miller; but we don’t want ‘global’ thought, we need local action and thought; but not so local to restrict the cross-talk from other localities. Global does not always equal good; you need to apply to local to the global, rather than what these corporates are doing which is applying the global to the local.