Fans of internet radio can breathe a little easier today now that Pandora has reached an agreement with the music industry that puts it on secure ground for the foreseeable future.
Excessive royalty rates were the main reason sites like Pandora hovered near the brink of collapse last year, but this agreement will see a 40-50% reduction in those fees through 2015. However, Pandora will have to give up a 25% share of its revenue as part of the deal. Because these fees are higher than those of traditional radio, Pandora will also have to impose 40 hour limits on users of the free version. Should you surpass that number, you will be required to pay a $.99 fee to continue listening through the end of the month. Users of the paid version will not see a service change.
All in all, it seems like a pretty fair compromise for the listeners, but the truth is that the internet is the future of radio—and it appears that the music industry is going to screw them while they can. [TechCrunch]