Pandora Tries to Flatten Earth – Cloud Dumps on PRS

A few years ago Pandora tried to launch in the UK, taking a PPL or nothing approach to licensing which unsurprisingly failed. I thought they missed a trick, and could have established a strong foothold with independent catalogues – which is where all the exciting new music is anyway – at low cost, and then waited for the business to come to them. They didn’t, and still are not here.

Pandora’s founder Tim Westergren clearly feels that the market for sound recording performance rights should be flat or nothing. Here he is in a recent interview with Music Week:

“In the US it is an arbitrated rate,” he said of the deal terms there. “It is a negotiated, economically rational process. More than anything, centralisation is what facilitates the growth of the businesses.”

At the same time as Westergren was telling the known universe how to trade its rights to his advantage, PRS chief Robert Ashcroft was fretting about the clouds that are massing above his collecting society picnic.

“It’s a complicated legal landscape and one which we haven’t yet got to the bottom of,” he said, noting the organisation and the market in general were still yet to determine what a “real price” was for a mass-market service.

Ashcroft seems to be coming from a position of startling economic and technical naivety, suggesting that clouds might both cannibalise sales and legitimise unlicensed music acquisition.

“If you admit stuff into a service that was not actually purchased there will be value leakage. We have struggled for years to build up a viable online licensing business and we are very proud of what we have achieved. But all of that could be cut by a factor of 80%”

What both of them are saying is that they feel incapable of operating in a free and open market. Westergren deliberately obfuscates, claiming economic rationality for a process which is in reality a punch up, with market dominance as the prize and the US government as the referee. The PRS board is presumably in the middle of a factional deadlock, and that means headlock for Ashcroft while he waits for a clear direction from the 6th floor, reducing him to Chicken Little-isms because he is damned if he does and damned if he doesn’t.

This fear is understandable. The collective farm, expressed as a PRS or a Pandora, is a feature and product of the Union of Soviet Satellite Republics of Music, and it’s rubbish if you need some fresh turnips but great if you have the sole contract to supply semi-functional tractors. And it largely solved the problem of feeding the population at a very basic level.

It is not surprising that nobody is stepping forward to be our own Nikita Khrushchev and destroy the Machine Tractor Stations that held the system locked in its under-productive state; hunger and disruption ensued when he did. These are difficult decisions for all of us, and any change requires a leap of faith. It will however, I am sure, be much more difficult to resurrect a free market out of an over-regulated technocracy, than to allow us to find our feet however shakily before the chains go on.

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