How SoundExchange is Killing the Radio Star

Just in case you missed it, the latest from the internet radio scene has popular streaming audio service Pandora ready to bow out of the business thanks to a significant rate hike by SoundExchange. Although some claim that Pandora could improve it’s business model through more advertising the real issue at hand is the undeniable attack on streaming media services by SoundExchange. Just like the recent fuss over the throttling of bittorrent traffic by Comcast, this latest attack aims to accomplish one goal; the elimination of “new media” streaming content over the internet. Why you ask? Simple, these new business models are disruptive of traditional media and take control away from the middlemen companies such as SoundExchange and Comcast. Comcast wants to rid it’s own network of any potential competition to it’s own On Demand service while SoundExchange is using high fees to squeeze out competition to both traditional radio broadcasts and satellite services.

In reality both of these companies will end up losing in the end because streaming services will simply become to difficult to stamp out. If companies cannot do buisness in the U.S. due to regulation or heavy fees/taxes then they will simply move offshore. In the case of streaming radio folks will simply migrate to underground radio streaming in the form of free shoutcase servers or other such technology. In the end companies like Comcast and SoundExchange will die (or suffer significantly) from their own lack of vison.

9/24/2008 UPDATE: Looks like a deal has been reached that spares the online radio providers the brunt of the new charges.