Pandora Faces Imminent Collapse: Founder

Pandora, one of the nation’s most popular Internet radio services, may be on the verge of collapse, according to its founder in a Washington Post report. We’ve reported on it in the past, but to recap, Pandora’s Music Genome Project lets users create custom radio stations based on music they know they already like. This service has spawned a host of mobile initiatives, including versions for AT&T and Sprint phones as well as an iPhone app.

But due to royalty disputes with the major record labels—which have been going on for quite some time now—the end may be near. “We’re approaching a pull-the-plug kind of decision,” said Tim Westergren, who founded Pandora, in the article. “This is like a last stand for webcasting.”

At the heart of the problem: Last year, an obscure federal panel ordered a doubling of the per-song performance royalty that Web radio stations pay to performers and record companies, the report said. “Traditional radio, by contrast, pays no such fee. Satellite radio pays a fee but at a less onerous rate, at least by some measures.” The sides are still very far apart, according to the report.

(Image credit: Thor Swift/Washington Post)

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