RIAA May Get Its Wish: Pandora Leaning Towards Shutting Down

Last year, we noted that the new webcasting royalty rates pushed through by the RIAA appeared designed specifically to kill internet radio. These royalties are different and much higher than things like traditional and satellite radio.

The RIAA knew exactly what it was doing in pushing these higher rates: it was killing off alternative routes to promoting non-RIAA music. The RIAA labels have always thrived off a very limited distribution and promotion channel.

The RIAA's spinoff, SoundExchange, gets to collect money on non-RIAA music as well. Oh yeah, it gets better too: if SoundExchange can't find the musicians to pay, it gets to keep the money. That's why it has a history of not looking very hard for musicians in order to pay them.