Trying to close Pandora's box

Worst news of the year so far is that Pandora, the internet music station that uses deep analytics rather than social networking methods (as Last.fm or blip,fm does) to serve music you like may have to close due to high tariffing - says the Washington Post:

Last year, an obscure federal panel ordered a doubling of the per-song performance royalty that Web radio stations pay to performers and record companies.

Traditional radio, by contrast, pays no such fee. Satellite radio pays a fee but at a less onerous rate, at least by some measures.

As for Pandora, its royalty fees this year will amount to 70 percent of its projected revenue of $25 million, Westergren said, a level that could doom it and other Web radio outfits.

Its a real pity if this happens, Pandora's Music Genome analytic system gives - in my experience anyway - far better results than social media based services ( to the extent that I believe this is the next step after social media for many web services ).

An afterthought - I was following the discussion on Slashdot, and its clear that Pandora and its ilk will live - its far too good to lose - it will just go to the P2P freenet if this practice continues, thus hurting the Industry even more in the medium term. If ever there is a case study of a short sighted tactic to shoot yourself in the foot strategically, this is it.