PANDORA FOUNDER ON CRB RATE: “OUR BUSINESS MODEL IS BROKEN”: San Jose Mercury News columnist Mike Cassidy published a blog today on Pandora’s founder Tim Westergren and the debate over webcast royalty rates. Westergren spells out the dire position of Pandora under the webcast royalty rates, saying, “We’re not paying the new rate…We can’t afford it. Our business model is broken.” Westergren states that $17 million of Pandora’s $25 million revenue would go towards paying the new royalty fee, and that Pandora simply wouldn’t survive under the new royalty rate—despite the expansion of the service’s reach (see Wi-Fi Radio story below). The article otherwise quickly sums up the royalty rate dispute (in which Pandora has taken an active role in lobbying efforts; RAIN coverage here and here) for mainstream readers, and perhaps represents the growth of this debate to a larger audience. Read Cassidy’s blog here.

$200 WI-FI RADIO ACCESSES PANDORA STREAMS: Grace Digital has announced (here) that their ITC-IR1000B Wi-Fi Internet radio will be integrated with Pandora’s customizable streaming radio. The Internet radio player also reportedly tunes in to over 11,000 streaming stations for a relatively cheap $200. “The addition of Pandora to our already extensive station list is a major step in providing a radio that clearly has the best content available via any medium,” said Grace Digital’s Chief Marketing Office Greg Fadul. Grace’s integration represents one more step in freeing Internet radio webcasts from the PC.

ZIPIT IM DEVICE STREAMS NET RADIO FOR LOW PRICE: The Zipit 2 Wireless Messenger is clearly targeted at the tween and teen demographic—consumers too young for cellphones or laptops, but who have already become addicted to text and instant messaging. But the device, which connects to Wi-Fi networks for messaging, also streams Internet radio (as well as playing mp3s from a SD card). At $50 for the device and only $10 a month for unlimited messaging and net radio, the Zipit may just be a financially-viable method of getting Internet radio on the go—no matter what your age.

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