First off, IF it does pass, Congress is dumber than a bunch of rocks. The arguments in favor of it were put together with worse than 1st grade math and make absolutely no sense. But let's assume for the sake of the question that it does pass. There will be a one-time substantial gain due to the expense line cut. After that though, you're back to square one because the Revenue side of the growth model equation has no longevity to it. Just ask Terrestrial Radio how the Ad market works for them. Sure it's a $17B potential market. But that market is poised to continue its stagnation if not outright decline...there certainly isn't any revenue growth behind that model. And if they try to push the Pay service, consumers will leave. It's only relevant because it is FREE.
"And if they try to push the Pay service, consumers will leave. It's only relevant because it is FREE."
I disagree and see upside potential for revenue. I pay my $36 per year and would gladly pay double or more. Some free users will migrate to pay as ads increase. This is a hidden and little understood opportunity here imho.
I do agree that argument being presented currently SUCKS. As I wrote earlier today:
"I watched the whole thing also. IMHO Pandora has picked a foolish and disingenuous argument to use as its number one metric "royalty payments as a percentage of revenue". The problem with this metric is simple...Pandora could just be portrayed as plain lazy, stupid, or suck at generating both ad revenue and subscription revenue, so revenue is a HORRIBLE metric to use as the basis for your argument. THIS is what opens Pandora up to criticism that "your revenue sucks because you business model sucks" or "if you guys just paid more attention to revenue, you wouldn't have to take it from the artists pockets".
Don't they have focus groups to debate this before hitting the streets? It is such a BAD argument to make and opens you up for immediate criticism of your business model. The ONLY viable and defensible argument to make is "consistent cost of content regardless of delivery model...i.e. level playing field". Now, can you standardize terrestrial, satellite, and internet? THAT is the rub and this whole "content cost as a percentage of revenue" is the worst argument I have ever heard in my life. Westergren was DECIMATED yesterday trying to make that argument by both members of the panel and the Congressmen...STUPID and poorly thought out.