the submersible dirigible

Wired reports today that muxtape — the slick, music and mixtape networking webapp — has become the latest victim of the Recording Industry’s tireless quest to kill all the internet’s happy places.  Despite a sunny statement from the muxtape crew, “Muxtape will be unavailable for a brief period while we sort out a problem with the RIAA,” this development does not bode well for the site.

Meanwhile, Pandora — another of the internet’s broadcast pioneers — have recently indicated that last summer’s egregious Copyright Royalty Board internet broadcast rate hikes are finally catching up with the company, slowly strangling the life from their successful business model.

Pandora is one of the nation’s most popular Web radio services, with about 1 million listeners daily. Its Music Genome Project allows customers to create stations tailored to their own tastes. It is one of the 10 most popular applications for Apple’s iPhone and attracts 40,000 new customers a day.

Yet the burgeoning company may be on the verge of collapse, according to its founder, and so may be others like it.

“We’re approaching a pull-the-plug kind of decision,” said Tim Westergren, who founded Pandora. “This is like a last stand for webcasting.”

Last year, an obscure federal panel [Copyright Royalty Board] 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. — Giant of Internet Radio Nears Its ‘Last Stand’ By Peter Whoriskey

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.

Techcrunch naively suggests (“Pandora, Our Sacrificial Lamb“) that Pandora’s demise will rouse the music industry giant’s from their slumber, compelling the industry to recognize the potential of open content communities like YouTube, muxtape and Pandora at long last.  Fat chance Mr. Arrington.  Content industries want nothing less than absolute control over their creative properties.  The very existence the DMCA — a law that turns customers into criminals if they dare circumvent DRM for the sake of convenience/usability — demonstrates the content industry’s unwillingness to play fair.  The growth of internet broadcasting, while providing new choices for consumers, leaves the labels with little control over content delivery and presentation, upsetting a business cycle that maintains profitability and ensures predictable outcomes in an unpredictable market, but depends on payola, brain-dead product placement, and incestuous partnerships with content patsies like Clear Channel, the Disney Channel or MTV.  Internet broadcast introduced an element of unpreditability, and had to be killed.

Lawrence Lessig — Stanford law professor, founder of Creative Commons, and indispensable advocate of digital rights — puts the CRB internet broadcast rate hike and Pandora’s demise into a broader context with his final presentation on creative rights (embedded below); in his final speech, and tirelessly on his blog, Lessig highlights the corrosive relationship between Congress and the content industry, and their collaborative, slow-motion erosion of “free culture.”  With payola, drm/DVD John, the Sonny Bono Act, Napster, the riaa’s frightening litigation strategy, and Pandora in mind, it’s hard to imagine the music industry ever willingly cedeing power, as Arrington suggests.