If new music is created and nobody can find it, does it make a sound?

Time was you could listen to alternative radio and discover new tunes. Time was you could spend hours browsing the record store, digging up arcane and obscure artists. Time was the music could be found. But now it seems like all the radio stations are playing the same 20 songs (and a zillion commercials). Now CD departments are shrinking and disappearing from the stores. And now internet radio may be about to disappear. If that happens, how will you discover new music?

I had tried Pandora back when it launched. It was ... okay, but not great, and I let it go. But last month, when the iPhone apps came alive, and I found the Pandora app sitting there, I ended up revisiting the "music genome" service ... and found that they are doing much better at finding music I like than they ever did a year or so ago.

In fact, Pandora now is fabulous! After years of living in a music wasteland, with crap on the radio, worn-out "classics" on satellite, and pretty much nothing to be found on iTunes or in the local store, I rediscovered new music (and even ended up buying some). Pandora has been an incredible resource for introducing to me new music I never would have encountered otherwise.

Of course, that means it's too good to stick around, right?

Via the Chronicle of Higher Education:

Last year when the U.S. Copyright Royalty Board substantially hiked the royalty fees for songs that are Webcast, online broadcasters sounded an alarm. At the very least, they said, the raised fees would force some online radio stations to cap their audiences. At worst, the broadcasters warned, the royalty board could end up writing Internet radio’s swan song.

Now it looks like those grim predictions may come to pass. The founder of one of Internet radio’s leading lights, Pandora, tells The Washington Post that Web royalties may soon force his station out of business. The fees now soak up 70 percent of Pandora’s $25-million annual revenue, according to Tim Westergren. “We’re approaching a pull-the-plug kind of decision,” he says.

What’s striking is that Pandora is no fly-by-night operation: The Web-radio service, which lets users build radio stations to match their own tastes, reaches about a million listeners every day, and its recently created iPhone application has become one of the most popular downloads for the device. But the rules of the marketplace, as currently drawn up, are none too favorable to online broadcasters. Terrestrial radio stations don’t have to pay per-song royalties, and satellite radio providers pay only small fees. But by 2010, Webcasters can expect to pay between two and three cents per hour per listener.

Michelle Wolverton offers some context:

Pandora faces closing the lid on it’s popular streaming radio service after the CRB, earlier this year, tripled the fees due to SoundExchange. Each time a streaming service plays a song they have to pay a small fee to Soundexchange. Soundexchange is deeply associated with the RIAA, who continuously acts like the bully on the playground. Making all the rules and taking your lunch money to boot....

...I support 100% that artists make money from being played ANYWHERE. I know musicians who are struggling to keep up in the daily grind. I also know that there are a few who have passed along their music to Pandora so that new fans can be reached. I’ve also discovered new music over at Pandora and would hate to see them close their doors. I don’t think that anyone in internet radio objects to paying fees for playing songs, but suddenly requiring internet radio to pay 3x the fees that the did for streaming is unbelievable. Yet, it’s done.

Oh, and your regular AM and FM stations? They aren’t getting hit with the same outrageous fees. SoundExchange and RIAA are acting unfairly because they are scared of what internet radio is doing for independent artists at the same time being damn greedy with what shouldn’t primarily go to them, but to the artists that they “represent”. A lot of the time that money doesn’t reach the artist because Soundexchange “can’t find them“.

Techdirt has a dark analysis of all this:

The RIAA knew exactly what it was doing in pushing these higher rates: it was killing off alternative routes to promoting non-RIAA music. The RIAA labels have always thrived off a very limited distribution and promotion channel. After all, distribution and promotion are where record labels really make their money. Competing methods of distribution and promotion are threats to be killed off -- and the RIAA may have succeeded here (with Congress' and the courts' help, of course).

Jenn at BlueCherryDoughnut is upset:

Pandora recently also released an iPhone app, allowing iPhone users to tap into their stations via their phones (which, if I could afford an iPhone, would definitely be an app I would be utilizing). What’s more, a federal panel delivered the order to increase the fees. Ah, our government hard at work in bed with big business. Ain’t it grand!?

I listen to Pandora at least once a week (and usually more often), and have found tons of new music/musicians that I enjoy through listening to it, music I might not have discovered otherwise. I will endure pop-up ads, onsite ads, ad breaks between every couple songs, whatever….just to continue to have access to this online service.

But if Pandora falls, how long till all the other internet radio stations fold as well?

On The Open Piehole, Sister Joyous Whip of Enlightenment has one word to offer on all this:

Crap!

Via Read/WriteWeb, we learn that, despite efforts by Rep. Howard L. Berman (D-Calif.) to arrange a few last-minute deals between web radio stations and SoundExchange, the organization that represents artists and record companies that would reduce the the recent fees, Pandora CEO Westergren does not sound optimistic.

"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." We don't blame you Tim.

In a comment on a Gizmodo thread, Bobbee offers a simple problem:

I think the RIAA just wants to count the money made for them directly through Pandora (things like click-throughs from Pandora to Amazon or iTunes, etc). Since there is no easy way to tell that I bought a CD down at my local shop because I'd been turned on to that music from Pandora, it doesn't count. Typical corporate thinking: if you can't produce direct numbers to prove it's making money then, at best, it's not worth the effort/resources. At it's worst, it's losing money...forget the "intangible" benefits.

Jill Sommer suggests that Pandora change its business model:

That’s sad, because I have been turned on to several new groups and artists through Pandora and even recently attended a concert by “Over The Rhine” because I enjoyed some of their songs through Pandora. I wrote about Pandora back in June in a post about music in the workplace. I for one would pay to make sure they don’t close their site, so hopefully the people at Pandora will reengineer their business model to fee-based accounts....

...Most of you overseas readers probably don’t understand why this is such a big deal to U.S.-based companies, since foreign radio stations have always paid fees for public performance of music. Let’s just say that no one likes change, and this presents a big change to the status quo in the United States. Unlike European countries and other countries around the world, the United States did not collect payment for public performance of artists’ work prior to 1995. Users of music, the digital music service providers, freely performed these works at will, without paying the owners of those recordings or the featured artists who performed the songs. The Digital Performance in Sound Recordings Act of 1995 and the Digital Millennium Copyright Act of 1998 changed all that by granting a performance right in sound recordings. As a result, copyright law now requires that users of music pay the copyright owner of the sound recording for the public performance of that music via certain digital transmissions. Conventional radio stations don’t pay these fees yet, but that should change soon.

What do you think? How do you find new music?

BlogHer Tech & Web Contributing Editor Laura Scott blogs at rare pattern and the pingVision blog.