Music recommendation service Pandora says it is set to block UK users from 15th January as it is unable to afford new royalty rates.
The firm says that royalty collection agencies PPL and the MCPS/PRS alliance have demanded excessive fees.
Founder Tim Westergren emailed Pandora’s UK listeners to explain that the move had rendered its non-subscription, ad-supported model unworkable.
“We have been told to sign these totally unworkable license rates or switch off, non-negotiable…so that is what we are doing.”
“Lest you think this is solely an international problem, you should know that we are also fighting for our survival here in the US, in the face of a crushing increase in web radio royalty rates, which if left unchanged, would mean the end of Pandora.”
Pandora, as with other web radio services, has been struggling to survive after the Recording Industry Association of America (RIAA) decided to raise royalty fees for internet broadcasters.
Under the RIAA’s scheme, they are forced to pay a flat fee per song, with the charges rising every year up to 2010.
Pandora closed all of its non-US operations after the fee hike, but was hoping to keep the service alive in the UK.
This may spell the end of many free, ad-supported internet radio services, as many will be forced to either introduce subscription charges or cease trading if the recording industry continues to insist on higher royalty rates.