This service is terrific. It is too bad that the RIAA is changing their royalty structure. I am not certain what your daily discussions are about, but I want to try and offer a letter to combat the newer royalty structures of Pandora. You may already have these ideas sorted out, but maybe not. I wanted to write to you and present these ideas so you could keep the service running.
But I think you guys should seriously consider one of these options:
IDEAS TO SAVE PANDORA:
1. Partnerships to get around RIAA
Maybe call John Dorr and use his brains to find a worthy IP lawyer and then go into partnerships…
Build controlled partnership with Amazon.com’s mp3’s digital music – to stream people’s already purchased libraries
Build controlled partnership with iTunes subscriptions
Build controlled partnership with Siruis/xm and stream their content
This will reduce the royalty worries since these people already have iTunes accounts. Of course, there will be a need to add in cost for developing more advanced accounting to follow through with RIAA auditing
Revenue costs also are associated with user licensing auditing on your part, so don’t get caught with a huge IT bill.
Your logic and technology is worth while to a company like Amazon that already has a royalty structure / relationship with the RIAA. SO there maybe a way to license the technology with Amazon…
You COULD work it into a licensing deal with them so they will give API developers who work with audible to interact overall for streaming audio books. The ART of licensing a software technology and the logic behind this technology is what has made Sony and Philips electronics so much money. Especially with the creation of CD’s and the subsequent royalty fees they made per disk. I worked on a streaming technology concept at Philips for mp4. You can make licensing revenue from streams, as you already know.
In a way, this is what Amazon.com is already doing with their shopping cart technology. So you COULD use that as a structure or template.
2. Follow through with the new royalty structure and offer Pandora for a charge to your end users.
You can charge people a monthly subscription fee (don’t get crazy with this – advertising revenue should suck up a lot of the corporate costs!)
You can add in MINIMALLY INVASIVE advertising deals with groups that are in streams.. like the way Hulu works on advertising structures.
4. Finally, if NONE of this works, then you can devise ways to take the database logic and user rankings and desires for for music format catagorization and sell this to terrestrial radio stations for building modern play lists. High priced boxes… and eventually move into video technologies.
It is a fantastic foundation for a greater revenue model. The design needs to mature quickly, to keep your doors open.
One of the things that Steve Jobs has done is organize things at apple to remove the unnecessary stuff and sway his loyal following to buy services and subscriptions. He fought to keep the price down, regardless of what NBC and Warner Brothers tried to influence. It will keep the volume of purchases up .