Joe Kennedy, president and CEO of Pandora, one of the largest and most popular Web (Internet) broadcasters had received bad news. The Copyright Royalty Board (CRB) has announced its decision to increase the fees to pay for the radio industry 2.5 times in the next five years, effectively bringing the profitability of Pandora out of sight. Pandora was a “webcast” which is based on the Music Genome Project, which encodes the various attributes of a song (do “music DNA”). With this technology, Pandora could provide a selection of songs with the same “music DNA” to the initial choice of the user. Pandora, however, with other broadcasters, was subject to a special legal regime in relation to the charges, which were superior to the rights of satellite radio and that the AM / FM radios were totally exempt. This case concerns the issues of copyright, the economics of new media, and specialized laws established to regulate a new subset of an existing industry.
by
Robert C. Pozen,
Alex Rosenfeld
Source: HBS
22 pages.
Release Date: August 6, 2009. Prod #: 310026-PDF-ENG
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