Should there be a price for streaming unlimited free music?

“To give a text an Author is to impose a limit on that text” – Roland Barthes (1967)

The technological revolution of the last few decades has brought with it a deluge of technologies that have changed society as a whole, as well as the way in which we all live and interact with each other in this new interconnected digital age. However, one of the more complex issues that has come to light because of these rapid advancements is that concerning the increase in illegal pirating and copyright abuse, and the subsequent rise in open content licensing.

An open content license can be defined as a licence that grants “the right to reproduce, adapt, distribute, perform, display, communicate, and translate a work” (Creative Commons, 2012) without necessarily having to pay the creator of said work. Since its establishment in 2000, Pandora Internet Radio have been paying 1.85% of its revenue in royalty rates to the artists and record companies who write and produce the music that they distribute (Pandora, 2012). Therefore, it can be seen that Pandora do not operate under an open content license, which for the music industry is vitally important. Here’s why:

In the first quarter of the 2011 financial year, Pandora’s total revenue increased by 136% from the same period in 2010, amounting to approximately $51 million. Additionally, its content acquisition costs in the same quarter stood at close to 54% of its gross profits, amounting to approximately $69.4 million of its total revenue (Pandora, 2012). However, if this media technology could stream music without having to pay royalties than its net income would effectively double and the annual $3 million that it is currently paying Lil’ Wayne, $1 million it is paying Adele and $135,000 it is paying Bon Iver (Fixmer, 2012), along with the royalties it pays to every other artist whose music they stream, for the acquisition of their copyrighted content would instead be staying within Pandora’s possession. As a result, we would see a rapid rise in Pandora’s revenue and share of the market, accompanied by the rapid decline in artist’s who could afford to live off or continue making music.

Reference List:
1. http://www.tbook.constantvzw.org, Barthes, R 1967, Death of the Author, edition 6, Aspen, New York City, New York, pp 1-6
2. http://creativecommons.org, Creative Commons 2012, Creative Commons, Massachusetts
3. http://www.nytimes.com, Sisario, B 2014, Pandora Wins a Battle, but the War Over Royalties Continues, The New York Times, New York, pp 1-4
4. http://investor.en.pandora.net, Pandora Media, Inc. 2012, Annual Report, Oakland
5. http://www.businessweek.com, Fixmer, A 2012, Pandora Is Boxed In by High Royalty Fees, Bloomberg Business Week, Bloomberg, Sydney, pp 1-2
6. http://strugglingmuso.wordpress.com, Fraser, D 2010, Digital Royalty Payout Office, Struggling Muso