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RAIN 11/7: Pandora says settlement still "tremendously unfair;" White space may usher "telecom revolution"

Posted on: 11/07/2008


Pandora founder Tim Westergren revealed that “the hard stuff has been done” in negotiations between the DiMA and SoundExchange over Internet radio royalty rates, according to The Wall Street Journal’s MediaMemo blog (here). However, he believes the new compromised rate is still “tremendously unfair” when compared with satellite radio’s rate.

If the rates remain uncomfortably high for webcasters, attention will again turn to how ad revenue can be increased to pay the royalties. Analysts estimate Pandora would need a CPM rate of about $21 for every thousand visitors under the current fee structure, “a hard rate for big professional Web sites to achieve,” writes Peter Kafka of MediaMemo. Additionally, “web advertising in general is under pressure, and ad buyers say that their clients are increasingly skeptical about trying out ‘experimental’ mediums…unless the rates get very, very low, or Westergren’s company has hired some very, very persuasive sales people, it’s going to remain a struggle.”


The FCC’s decision Tuesday to open the unused space between UHF television channels called white space “could usher in a new telecom revolution“ according to analysts.

The white space spectrum would allow wireless signals two to three times farther than Wi-Fi and support download speeds of 20 megabits per second and above. For consumers, this could mean an “era of seamless roaming across technologies…For telecom service providers, it will be the beginning of a new world,” writes Priya Ganapati at Wired (here).

Companies like Google, Intel Motorola, Phillips and Dell are scrambling to utilize the newly unlicensed spectrum. Dell has announced plans to produce white space compatible laptops, while Google has already applied for a patent for a device to utilize the spectrum and “could even end up becoming a broadband service provider.” Analysts believe we could see “new mobile devices that could become alternatives to smartphones or companions to notebooks.” Motorola is pondering using the spectrum for high-speed Internet access, video broadcasting and eventually home networking, reports PC Mag (here).


The FlyCast Internet radio streaming program is now available for Blackberry mobile devices as previously announced (RAIN coverage here). The free download is compatible with the Curve, Bold and even the upcoming Storm models. FlyCast tunes in to over 1,000 Internet radio stations, including radioIO and AccuRadio. The interface is reportedly, “similar to the one found on their iPhone client, with some slight variations – presumably to accommodate the trackball method of interaction.” For more, read Zatz Not Funny’s coverage (and more screenshots) here.

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  1. Notwithstanding Mr. Westergren’s welcomed announcements about an impending settlement, it is sad that during the past year or so Congress refused to enact the Internet Radio Equality Act.

    Congress failed to do so, even while being cognizant that various aspects of the Digital Millennium Copyright Act itself are in need of significant reform.

    The DMCA imposes on Internet radio the “willing seller and willing buyer” standard, while it accords satellite radio a more liberal criterion for assessing performance royalties and while it allows terrestrial radio exemption from these fees.

    How or why Congress can allow this situation to continue while leaving the representatives of Internet radio to the tender mercies of SoundExchange and to SoundExchanges’s primary beneficiary, the recording industry, is, to me, a mystery.

    Charlie · Nov 21, 07:55 AM · #

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