How long can Pandora continue to get it wrong?

On’s blog as at 4 October 2007:

Dear Global Pandorans –

It’s been a few (painful) months since we had to begin blocking listeners outside the US. Many of you have been writing in for updates, so we thought it would be useful to post the latest news. Sorry for not having done so sooner. Sadly, our posting that “we are working hard on international licensing” remains the same.

We have been working intensively on bringing Pandora to the UK first and we were hopeful of doing so. The situation with regards to licensing took a bad turn a couple months ago with the issuance of a publishing rate in the UK which leaves total sound recording royalties and publishing royalties substantially out of whack with the realities of ad-supported webcasting/internet radio economics. So we’re back in the trenches trying to find an answer, working with the recording and publishing industries, that works for everyone. This has been an intense period of education and negotiation and it continues unabated.

As it stands now, there is still no affordable license for a webcaster to stream legally (ie. abiding by all standing copyright law and properly compensating performers and composers) anywhere outside the US, (actually, make that within the US too as we’re trying to work through a whole other mess here as well!) Paul (our Managing Director of Pandora Int’l) is working full time on the international business out of London.

We continue to be cautiously optimistic that a reasonable answer will be reached – largely because it would be so counter-productive for everyone not to do so. But we remain unable to make any solid predictions about timing – history has taught us that’s a fool’s errand.

You can trust that this remains at least as frustrating for us as it is for you.

Keep the faith…

Tim (Founder)

Can it really be true? Can they really have launched an entire service without really figuring out their contractual obligations? First by having problems with global users, and now with their existing setup? If this were a publicly quoted company there are so many phrases in this innocent blog posting that would give me cause for concern: a few painful months; situation took a bad turn; no affordable license; whole other mess; unable to make any solid predictions. It doesn’t sound good.

My take on it is that, in ‘blocking’ non-US residents, they screwed up bigtime and will never be able to recover (and I’ve said this before). How do you block non-US residents from an online service? In a similar act of naivety their answer is, only accept US zipcodes. So just find any US zipcode and use that. How can they prove you don’t live at the White House? Along with the (presumably) thousands of other people who cohabit with you at the seat of US democracy, or indeed at the Pentagon, or Beverley Hills 90210 for that matter.

It seems they cannot figure out a way to make online streaming radio pay. If so, how can Last.FM manage this? My hunch is that Last.FM didn’t totally screw up their marketing information so they’re sitting on a gold mine of information they can sell on, allowing them to overcome prohibitive licensing fees.

I hope Pandora make it, I really do. I prefer it to Last.FM. But I fear Last.FM may have done the right thing, and Pandora have not.

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5 thoughts on “How long can Pandora continue to get it wrong?

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