Oakland, Calif. - Streaming Web radio service Pandora, which claims about 1 million daily users, says that the recent doubling of royalty payments it must pay to copyright holders may soon force the company to turn off its streams, co-founder Tim Westergren told the Washington Post. "We're approaching a pull-the-plug kind of decision," said Westergren.

"This is like a last stand for webcasting... We're losing money as it is. The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we're doing is wasting money."

On the policy side, Rep. Howard Berman (D-Calif.) is attempting to broker a deal between webcasters and SoundExchange, the entity created by the labels to collect digital royalties, to lower the fees.

But, as Berman tells the Post, "Most of the rate issues have not been resolved."

Pandora is expected to shell out 70% of its projected revenue of $25 million this year on fees it must pay each time someone listens to a song on its service.

Along with Pandora, the rate hike is likely to force a great deal of smaller music webcasters to reconsider their business models, or stop streaming entirely.

Westergren also told the Post the company would soon begin serving ads akin to National Public Radio, where advertisers could sponsor half-hour time slots.

Related Links:
http://snipurl.com/3hhdl (Washington Post)

http://www.pandora.com