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RAIN 9/27: High royalty rates in Canada posing a challenge to webcasters

Posted on: 09/27/2010

PANDORA’S WESTERGREN: “RATES ARE ASTRONOMICAL” IN CANADA

High royalty rates sought by the Canadian music industry are keeping some webcasters like Pandora from launching in the country, according to a recent article from The Globe and Mail.

“These rates…are astronomical,” said Pandora founder Tim Westergren. “As long as rights societies take this approach, they will prevent Pandora from launching to Canadian users.”

Just what are the rates? According to The Globe and Mail, Canadian royalty collection agency Re:Sound wants next year to charge music services that stream to mobile devices the greater of 45% of gross revenues in Canada or 7.5-tenths of a cent per song.

By comparison, a large pureplay webcaster in the U.S. would pay the greater of 25% of revenues or $0.00102 per song per listener in 2011 with a minimum fee of $25,000.

Other services do plan to launch in Canada despite the fees. “I don’t think that would hold us back. It would just end up making the price to the consumer more expensive,” said David Hymna, CEO of music service MOG.

Meanwhile, music service Rdio is already operating in Canada. The company worked out its own licensing deals with SOCAN and Re:Sound. CEO Drew Larner said, “I believe there’s money to be made in Canada. There’s a desire to consume this kind of service, presumably, in Canada.”

You can find the full article from The Globe and Mail here.

RAIN SUMMIT EAST KICKS OFF TOMORROW

The second-annual RAIN Summit East will get underway tomorrow at 12:30pm in Washington D.C. It’s sure to be a memorable afternoon: our packed agenda includes keynote presentations from Bruce Reese, president/CEO of Bonneville, and former Forrester Analyst Sonal Gandhi. Panels include a discussion on the future of in-car Internet radio and a programmer’s panel moderated by AccuRadio COO John Gehron.

The Summit will also host the presentation of the first-ever RAIN Internet Radio Awards and the day will be capped off by one of our legendary RAIN Reader Cocktail Parties! All that is just the tip of the iceberg. Be sure to check out the full agenda. We hope to see you there!

VISION CRITICAL: NEARLY 60% OF U.S. DRIVERS INTERESTED IN STREAMING ONLINE MUSIC SERVICES TO CAR RADIOS

A new study from Vision Critical found that 58% of U.S. drivers who spend at least 15 minutes in their car per day are interested in in-car online music and radio services. In fact, 9% said they already have streamed such online content through their car stereo systems. 59% of U.K. respondents were interested in streaming online music services to their car stereos, as were 52% of Canadians.

While Vision Critical warns that “we should be careful to assume that increased use of in-car audio alternatives will displace listening to terrestrial or satellite radio,” they also point out that “online in-car access provides opportunities for radio stations that embrace interactive and mobile platforms. Given the options that are becoming available, listeners will be expecting more from their radio station than a linear broadcast.” You can find much more on Vision Critical’s study here.

EDISON: 20% OF 12-24s USED PANDORA IN LAST MONTH, 11% LISTENED TO AM/FM SIMULCASTS

Edison Research’s new study “Radio’s Future II: The American Youth Study” reveals that 13% of all 12-24s listened to Pandora in the last week. A full 20% used the service in the past month, compared to 11% that tuned in to AM/FM simulcasts online. More details from the survey will be revealed at the Radio Show produced by the RAB and NAB this week (more info here).



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