Pandora founder Tim Westergren has written to all users with UK
IP addresses to inform them of the move, saying it was an email he
"hoped [he] would never have to send". He said he may call on users
to engage in political lobbying on the issue.
"In July of 2007 we had to block usage of Pandora outside the US
because of the lack of a viable license structure for internet
radio streaming in other countries," he said. "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."
Internet radio stations had to fight for their lives last year
in the US when a change in the licensing structure was announced
which, they claimed, would put almost all of the thousands of
stations there out of business. An incomplete compromise deal was
reached in August but negotiations continue on exact rates to be
paid.
Stations managed to mobilise their listeners into political
lobbying, swamping Capitol Hill with messages of support for the
stations and complaint about the changes, which were made by a body
overseen by Congress.
Westergren said that he may call on users to take similar action
in the UK. "We're going to keep fighting for a fair and workable
rate structure that will allow us to bring Pandora back to you," he
wrote to users. "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."
Westergren said that the company was told to pay the per-track
licensing rates or stop broadcasting, so they had to do the
latter.
Internet radio stations are mostly free and rely on advertising
for their income. They claim that if per track payments are charged
those fees will quickly outstrip their entire revenue, never mind
just their profit margins.
In the US the stations are fighting new charges which include a
minimum fee. These charges, they say, are higher than those paid by
satellite radio stations, while traditional broadcast radio
stations do not pay the charges at all.
"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," said Westergren. "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."
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