Pandora, webcasters given reprieve

Headlines in the United States and across the world highlighted the failure of the bank bailout, but while Congress shut down the bailout, Internet radio has been given added life by the exhausted Congresspeople and Senators.

CDFreaks has covered Pandora and its attempt to remain in business, and some of the trials and tribulations it still faces in the future.

Over the weekend, the House of Representatives passed H.R. 7084, with the Senate passing the bill late last night.  The Webcaster Settlement Act of 2008 will make it possible for webcasters and the Recording Industry Association of America (RIAA) to have additional time to negotiate royalty rates.

It has been rare for the RIAA, SoundExchange and Pandora to agree on the same topics, but H.R. 7084 support was unanimous across the board.  The main trade group hoping Congress would shoott down the bill, the National Association of Broadcasters, reportedly wanted to see the legislation fail so broadcast radio will no longer have to compete with major Internet radio stations.

"This reflects the progress we’ve made in negotiating, and the collective sense of optimism about finally reaching a compromised solution.  H.R. 7084 gives us the time and the legislative tools to see the process through to its conclusion," Westergren told CDFreaks last week.

President Bush is expected to sign the legislation with no objections.

Under the current fee arrangement, 70 percent of the company’s 2008 revenue of $25 million would go to the RIAA and SoundExchange.  The extremely high number brought Pandora close to its knees, although the site remains in operation at the moment.  Even though both sides are looking for new royalty payments, Westergren hasn’t publicly stated what kind of numbers he is negotiating for.

The next step is for both sides to come to an agreement before February 15, with Pandora founder Tim Westergren admitting the popular online radio station still isn’t out of the woods.