Every day I speak to a person who has Pandora or another music streaming service. I tell them to enjoy it while it lasts, because the Justice Department may take actions that will eliminate consumer choice in the not too distant future -- all to benefit their friends in Hollywood and the recording industry.
Many of my friends have a message for Washington – Don’t take away my Pandora. They don’t really care about the details of a very complicated legal construct that allows them to listen to music streamed on the Internet. They like this service and want it to continue.
Young people like the idea of the freedom from NSA Spying on phone calls. They don’t want Internet regulation that sounds innocuous like Net Neutrality. They hate the idea of the federal government imposing taxes on the Internet. And they love applications that allow the them to listen to music or watch videos.
Sen. Mike Lee of Utah is holding a hearing on music licensing next Tuesday. It is very important that people whom treasure music sharing programs to pay close attention to the hearing. This hearing could have a dramatic impact on a large segment of Americans who use their phone or computer to listen to music.
The Justice Department is studying two consent decrees that have governed the sale of music licenses for nearly 75 years. The distributors of those licenses have hired top gun lobbyists to pressure the Justice Department and members of Congress to lift the agreements allowing the recording industry and music publishers to fix prices on radio stations, television broadcasters and streaming music. Let's not forget all the money that the recording industry raised for President Barack Obama's re-election campaign.
In a free market, there would be no reason for agreements with the government not to fix prices. But due to the unique nature of copyright law and the way musical rights are aggregated to music publishers, there is no competition. Without the consent decrees, there would be no market.
The results of vacating the decrees would be devastating and the impact would be felt must immediately by fans of streaming music. With the bulk of their revenues going out the door in the form of royalty payments, Pandora and others probably wouldn't survive if the music publishers could dictate prices without the give and take of a marketplace.
Innovation is great. People are embracing new technology but the recording industry seems intent on holding on to a business model that has become outdated. That's why they send millions of dollars on lobbyists and why they hate technological innovation.
Senator Mike Lee’s wants to discovering whether the Beltway Bandits will win another insider deal at the expense of the American people.
It's not far fetched to envision a future where you turn on Pandora or your favorite streaming service and you hear the following message: “We are sorry, but Pandora was put out of business by politicians in Washington, DC.” The only thing preventing that from happening is two consent decrees with the government.