Journal 2, May 31

This article touches on the fact that as technology has made it so you can stream radio via the internet, more legal restrictions are being imposed on companies offering free streaming or streaming at low subscriber costs, enabling listeners to obtain music at a marginal or no cost compared to in the past. Pandora, which is currently an online leader in internet radio streaming market has over 7 million listeners in the United States. However, as the article points out, as more and more listeners are finding online radio more appealing, record and publishing companies, especially overseas, have pushed for regulation that mandates internet streaming radio to begin paying royalty rates per every song streamed. This new regulation of online radio stems from the music industry trying to cope with the fact that as a decreasing amount of people are listening to conventional radio and have certainly decreased their purchase of cds, technology has created a frenzied bleeding industry in search of ways to re-capture their revenue channels.
This is why Pandora had to pull the plug on offering its service to listeners outside of the States. In order to verify US listeners, users who were interested in signing up for the service had to enter their area code to verify their residence as stateside, and eventually had to verify the location of using IP addresses.
This is because the royalty regulation enforced outside of the United States was too high for Pandora to justify in their revenue models. For instance, when trying to enter the U.K. market in 2007, Pandora came up against a steep royalty rate of .08 cents per streamed song played.
Coincidentally, Pandora in 2007 launched Pandora Everywhere which allowed their services to be streamed globally through partnerships with Sprint, and later AT&T. Through alternative information technology, Pandora found a way to still offer its streaming service.
The argument is bittersweet as far as the implications of the ingenuity of such companies as Pandora who find ways around regulation to still “legally” provide music to millions of listeners for free. While it is argued that the service Pandora provides helps combat the illegal downloading frenzy devouring the bottom line of many entertainment conglomerates, technology also allows for the free dissemination and application of online radio, allowing listeners to enjoy music for free, at the cost of online advertisers. Therefore, as technology develops and evolves, who really will carry the burden of paying for the increasingly money-conscious yet augmenting appetite of the global consumer?

Other Sources:
http://www.lexisnexis.com/us/lnacademic/results/docview/docview.do?docLinkInd=true&risb=21_T6671873194&format=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T6671873197&cisb=22_T6671873196&treeMax=true&treeWidth=0&csi=5545&docNo=10

http://www.lexisnexis.com/us/lnacademic/results/docview/docview.do?docLinkInd=true&risb=21_T6671873194&format=GNBFI&sort=RELEVANCE&startDocNo=1&resultsUrlKey=29_T6671873197&cisb=22_T6671873196&treeMax=true&treeWidth=0&csi=161541&docNo=18
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