Pandora's Box

I like Pandora, the internet radio site. The first time I used it I thought it was awesome. You didn't even have to log on. You just type an artist's name into the search box and the program generates a station using the music of that artist and those that are similar. What better way is there to listen to music then hearing only what you want to hear?

When I read that Pandora wanted artists whose music they used on their site to take a cut in royalty payments I couldn't believe it. The claim was made that the company was successful but not profitable. That the only way Pandora would ever turn a profit is if the company could pay recording artists less.

Pandora even took their plight before congress in the form of the Internet Radio Fairness Act introduced late in 2012. Many major artists and recording companies were immediately move to action against the bill. However, time ran out on the 112th Congress and the bill was not passed. This year the most recent protests against Pandora have been made by the surviving members of Pink Floyd. The members complained that they had only received $16.89 for 1 million plays of the song "Low."

If a major legacy band like Pink Floyd only got $16.89 for a million plays of one song, then lesser known artist with fewer plays most certainly are receiving even less then that. So where is all the ad revenue that Pandora is getting, really going? Why must the artists, who are supplying the content, being asked to take less for the use of their work? Surely, there must be another way for such a successful company to turn a profit.

Enter iTunes Radio. A Wall Street analyst has just compared iTunes Radio to Pandora and has called it a worthy competitor. As a result, Pandora stock dropped by 9%. With that alone, one would think that Pandora would rethink their strategy. The artists were once in their corner. Why continue to alienate them, when it's their music that has made Pandora what it is today.

Pandora's box is indeed open.