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may 03, 2007:
pandora to shut out non-u.s. users
another example of ancient music laws killing a good service (or how to discourage startups to care about music rights)

Pandora, my absolute favorite user-generated-programs web radio service, today announced that it will cut off all of its non-U.S. listeners because of licensing restrictions. You may guess who is behind this: Yes, the music rights-licensing organizations – that would be my guess, too. This is really lame. Here we have yet another example of how outmoded licensing traditions and 50-year old laws kill something that really has value, that has been painstakingly built over the past few years, and that is helping everyone to discover and buy more music online. I think that if the music industry does not start solving these tired licensing problems ASAP it shouldn’t be surprised why everyone is now starting to fill their music needs via totally unlicensed sources that never even go nearly as far as Pandora has to become legal. I mean, come on, how many years has the music industry had to give a license to Pandora? Maybe the European Commission should start thinking about some penalties for PROs (Performing Rights Organizations), some fines for not making reasonable licensing deals available? How about a penalty for tardiness-of-business, for hampering the growth of new business or for sitting on your rear doing nothing while smart entrepreneurs and their investors are busting their butts trying to reinvent the music business?

It almost seems that a company that tries to do the right thing from the start gets punished at every turn while those that don’t even bother with getting any of the rights are the ones that A) get funded with tens of millions of dollars, and B) sell their company for hundreds of millions of dollars and get to do as they please while the music industry is acting all shellshocked and standing by. (Since they never bother to check out the new stuff until someone alerts them, not asking for a license would be the safe way to start, right?) With these outdated licensing structures and seriously handicapping business processes most of the music industry is actually encouraging people to completely ignore the rules if they want to get anywhere, anytime soon. For example, just like DRM is actually producing “piracy behavior” – by punishing legally minded users and giving them less value for their money (similar to DVD region coding) – the new webcasting regulations are forcing companies into noncompliance due to the lack of reasonable options.

If this isn’t bizarre, I don’t know what is! Here is my call to action for the music rights organizations around the world, the PPL/GVL, BUMA, GEMA, STIM, SESAC, and SOCAN: Get moving to license Pandora within 30 days – you’ve already had years to contemplate it!