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."
