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The difference is that your example is in a free market and music royalty rates are controlled by Congress.
by thasmin 14y ago
The difference is that your example is in a free market and music royalty rates are controlled by Congress.
- rprasad 14y agoThe royalty rates are controlled by Congress precisely to allow for services like Pandora to exist until the internet music market can reach bargaining parity on par with other music markets (i.e., radio, etc.) Without those rate limits, the RIAA would charge many multiples of the current royalty rates.
- rayiner 14y agoMusic royalty rates are not set by Congress. The Copyright Royalty Board sets rates for compulsory licensing. These are licenses copyright holders have to agree to for certain uses. Nothing stops Pandora from negotiating regular licenses with content producers. Pandora doesn't do it because they'd get a worse deal that way.