OK first off I chose to do Pandora considering I use it in my daily life and its one of the fastest growing Internet radio providers besides Spotify. First a little background information on Pandora.” Pandora's Music Genome Project powers the personalization of Internet radio by using musicological "DNA" and constant listener feedback to craft personalized stations.” In a simpler term you can put in any of your favorite song or artist and it will play that typical song or artist with other music that is closely related to it. First off I like to say that this is one of the greatest ideas in the past ten years to handle music online. I also feel like this helps with the issue of lost revenues, considering that it lets the users experience new music that they might not have listened to in the first place. This is an interesting advantage of Pandora, considering you get to hear artists that you may not have heard on the actual radio which is so commercially controlled and only plays certain popular songs. Internet radio sites like Pandora also pay royalties to record companies to stream this music, which means profits for the record companies, thus helps them regain some of those profits they lost because of this new digital age. Currently Pandora and Spotify have had to pay a higher rate of royalties than cable and satellite radio, with Pandora paying up to nearly 50 percent of its revenues in sound recording royalties. But now there is currently an "Internet Radio Fairness Act" being introduced to congress to help lower the royalty fees paid by Internet music-streaming services, to those paid by other digital and satellite radio stations. Now that most of the back-story has been told this definitely helps the issue of lost revenue but on the flip-side it can hurt them too. Now you might find yourself saying, but wait, if we already download the popular radio music wouldn’t you just download the new music you hear on Pandora. While yes this could be a possibility and would kill my argument I have one thing to refute that point. And that Pandora reported for the second quarter of fiscal 2013, total revenue was $101.3 million, a 51 percent year-over-year increase. Thus case in point I stick by my side that online radio stations like Pandora is a great solution to lost profits and while yes you can argue the other point numbers don’t lie.
Thanks for reading.