I remember being a Pandora fan in its early days. You know, the days when Canadians could get the service without any problems.
Then came the day when they had to shut down access by anyone outside of the US and there was no more Pandora streaming across the cyber highway into Canada. It was no surprise that in the uproar that followed from Canadian fans of the service that Pandora was blamed for cutting the service without a fight.
However then as now this was a decision that Pandora wanted to make but rather one they were forced into by Canadian rights holders who wanted their pound of flesh. Since it had to cancel the service in 2007 Pandora has continued to grow and is now one of the most popular music streaming services out there, and we still can’t get it.
In a recent article at the Financial Post Jameson Berkow shares an email that they had gotten from Pandora CEO Tim Westergren explaining exactly why Pandora isn’t available in Canada and like the Financial Post I’m reposting it here in full:
I think it’s very important that Canadian listeners understand that Pandora is eager to launch in Canada, but the rates that have been proposed by the Canadian music rights societies are simply uneconomic.
We are of course deeply frustrated by this situation for our own selfish reasons, but the real losers are Canadian music listeners, who don’t get to experience the joy of personalized radio, and a wide range of Canadian artists who would benefit from an improved way of connecting with new fans.
With over 80,000 artists (mostly independent) in our collection, direct licensing is not an option. We need a centralized structure. And one that is economically rational.
It’s high time for action on this issue. The inertia and obstructionism of rights societies is harming the interests of the constituents they purport to represent. As a long time working musician myself, I find it outrageous. How can these groups argue that preventing Pandora from launching in Canada benefits anyone?
The ridiculous thing is that the major Canadian rights holder group, SOUND, that Pandora would have to deal with regarding licencing has filed a request with the Copyright Board of Canada to actually increase the amount of money that all web streaming companies, like Pandora, would have to pay in order to do business in Canada.
If approved Pandora would be required to pay 45% of its gross Canadian revenues, or 7.5-tenths of a cent per streamed song, which ever figure is higher.
45% percent of gross revenues!
Talk about unheralded greed, especially considering that as in the US and trade groups like the RIAA the musicians don’t see any of that money as it seems to consistently disappear down administrative black holes.