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Radio Silence

Music streaming service, Pandora is set to close its UK operation next week after failing to reach a compromise with the record industry, reports Tim Hoang.

Automated music recommendation and Internet radio service, Pandora has announced that it is set to block connections to UK users on 15 January 2007. Pandora founder, Tim Westergren blamed high royalty demands from the UK’s two main UK collection agencies, the PPL and the MCPS/PRS Alliance for the demise.

"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," wrote Westergren in an email to users.

He continued to reveal his frustration at the UK’s record industry for its ‘unworkable’ demands in the email. "We have been told to sign these totally unworkable license rates or switch off, non-negotiable…so that is what we are doing. Streaming illegally is just not in our DNA, and we have to take the threats of legal action seriously. Lest you think this is solely an international problem, you should know that we are also fighting for our survival here in the US, in the face of a crushing increase in web radio royalty rates, which if left unchanged, would mean the end of Pandora."

The service, created by the Music Genome Project allows users to select a song or artist and then streams music that is similar, based on other users’ recommendations and opinions. Unlike some other Web 2.0 sites, such as YouTube, Pandora has always tried hard to comply with copyright holders. The UK arm of Pandora is the last territory outside of the US to shut down after the company closed the rest of the non-US operations in July 2007.

In response, the PPL expressed their regret about ‘Pandora’s decision to terminate its UK service’ and highlighted that the organisation had ’sought to agree a reasonable basis for licensing Pandora’s service in the UK’ with charges that were lower than the equivalent minima determined by the UK Copyright Tribunal.

A spokesperson for the PPL said, "In the course of 2007 two independent reviews as to the appropriate level of licensing fees for the use of music on internet radio services were conducted - one by the UK Copyright Tribunal and one in the US by the US Copyright Royalty Board. These reviews were exhaustive, and had access to detailed confidential financial information from the providers of Internet radio services. Whilst neither review has a direct application to the fees chargeable by PPL (the first applying to the rights of authors, composers and publishers and the second applying to streaming of sound recordings in the US), they are clearly relevant to the appropriate level of fees to be charged for the rights licensed by PPL."

The music industry organisation, which collects and distributes performance royalties on behalf of record companies and performers, was keen to stress that it had agreed fees with similar organisations.

Editor’s Note: At the time of publication, Pandora could still be accessed through the globalPandora site, while Web 2.0 blog Techcrunch describes another method for connecting to US-only sites.