Monday, August 18, 2008
Damn the man! Save Pandora!
GWS's blog buddy and co-worker Torontonian/Bostonian passed along this article published Saturday on TechCrunch. Michael Arrington says Pandora is doomed, and that maybe, just maybe, we won't know what we've got 'til it's gone. Say it ain't so!
For those of you who insist that the interwebs is little more than a series of tubes, perhaps a remedial course is in order. Former musician/composer Tim Westergren founded the Music Genome Project in 2000, hiring dozens of professionally trained musicologists to begin the sequencing of the building blocks of music. Songs are broken down based on their components: dry snare, melodic acoustic guitar, screeching vocals, etc. The data produced by the MGP powers Pandora, a free web radio service that allows users to create and then tune their own stations; to build a station, just type in an artist's name or a song, and Pandora goes to work trying to understand what you like about this artist/song and how to show you new stuff. In short order, an individual user can create and tune dozens of his own personalized radio stations.
GWS is a big fan of Pandora, as is everyone GWS knows who uses Westergren's simple, easy, and fun service. But now, the skies darken as the storm clouds of entrenched media approach...
Internet radio has failed to overtake its terrestrial and satellite counterparts in no small part because of uncertainty around the business model, and this uncertainty is driven mostly by a certainty that internet radio providers will pay markedly higher per song royalties than the folks at ClearChannel and Sirius/XM. The inability of certain senior Senators from Alaska to understand the intertubez combined with the massive lobbying groups aligned with traditional media outlets (think RIAA) means that Pandora and sites like it are left out when it comes to paying fair rates to content owners.
Arrington reports that around 70% of Pandora's revenues ($25m in total) are going to royalty payments, and you don't need an MBA to understand that this does not a good business model make. As Pandora has increased in popularity, it has done excellent work scaling all aspects of its operation with the exception of the one critical piece over which it has no control. Arrington is willing to accept Pandora as a sacrificial lamb if it makes everyone realize that the pig-headed powers-that-be are killing a great service, but this assumes that once the best free radio site on the internet is shuttered that 1) people will be outraged, 2) that they'll protest, and 3) that somehow, someway, that protest will be more effective than this one.
GWS is less than optimistic that the sacrifice of Pandora will suddenly snap all interested parties to attention: "Ohmigod, what happened to Pandora? We did what to it? Oh, oh that's just unconscionable, what were we even thinking? We've gotta change this, and we've gotta change this now!" Arrington does have a point: only Pandora's collapse is likely to bring sufficient attention to the disparity between internet and satellite/terrestrial radio rates to spur substantive change. But if Arrington's right, musicians allowing Pandora to die will be the first case in which people actually did have to burn the village in order to save it.