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Are Record Labels Backward?

The Washington Post recently carried an article about Pandora’s struggle to stay alive. The article raises some serious questions about the people running record labels. Giant of Internet Radio Nears Its ‘Last Stand’. SoundExchange, the organization that represents artists and record companies, managed to get the per-song royalty rate for web radio to be doubled last year.

The Washington Post recently carried an article about Pandora’s struggle to stay alive. The article raises some serious questions about the people running record labels.

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Giant of Internet Radio Nears Its ‘Last Stand’.

SoundExchange, the organization that represents artists and record companies, managed to get the per-song royalty rate for web radio to be doubled last year.

“Traditional radio, by contrast, pays no such fee. Satellite radio pays a fee but at a less onerous rate, at least by some measures.”

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Justification?

“SoundExchange…said it supports the higher royalties for Internet radio because musicians deserve a bigger cut of Internet radio profits.”

The key phrase here is “Internet radio profits”. They don’t exist. Even Pandora is not profitable yet and with this kind of attitude, web radio will be effectively dead in 2 years and only the ClearChannel’s will be left to stream online.

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In business school and all my readings, it has always been said that “it is better to have 10% of $1 million than 100% of nothing” but it seems that these brilliant businessmen do not think that way.

Independent artists, to my knowledge, welcome something like Pandora because it helps their music get discovered. This will only cause fewer artists to want to sign with record labels, which already suffer from a very negative perception amongst musicians.

So in the end, they have finally found another revenue source but have decided to choke the goose that lays golden eggs to get all the gold at once.

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We know how this fairy tale ends.

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About the author

I am a young entrepreneur who started my first company at 20 during my MBA program at the University of Miami. Our first project was the creation of RealVibes.net, later renamed Realvibez.tv, a leading online destination for Reggae, Dancehall and Soca videos, first launched in February 2002. I am the co-founder of Random Media, an integrated media and entertainment firm focused on Caribbean entertainment and culture, as well as co-founder of Kaizen Interactive, a digital marketing agency. Experience and Achievements - Secured deal for my venture (through the Realvibeztv channel) to become YouTube’s first Caribbean media partner - venture now part of YouTube’s new rental program - Random Media has signed distribution deals for e-book versions of a number of Caribbean books in the Amazon Kindle and Apple iBooks stores - Interviewed numerous times about using social networks for business, previously built up a Facebook fan page for Jamaica to over 55,000 fans in less than 2 years that is now being used by the Jamaica Tourist Board - Asked to endorse a book on entrepreneurship The Toilet Paper Entrepreneur alongside Donny Deutsch, Host of CNBC’s The Big Idea with Donny Deutsch - Contributed a chapter to a McGraw-Hill Publishing book, How To Make Money With YouTube - A judge for Business.com’s What Works For Business contest in 2009 I was born in Kingston, Jamaica, completed his B.Sc

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