It’s no secret that the music industry has undergone massive changes over the last ten to fifteen years. According to the Recording Industry Association of America, total US music sales have dropped an average of 8% each year since 1999, from $14.6 billion to just over $6 billion. Having heard this, you probably wouldn’t expect that in the first half of 2011, US sales are up by 1%. Okay, so it’s just 1%. But consider that in the first half of 2010, sales were down 11% year-over-year.

So what’s responsible for reversing this trend? Ever-increasing broadband speed has enabled mass media consumption on the web, paving the way for music discovery services like Pandora,, Grooveshark and iLike. Because of these services, the average person can now find and listen to a more diverse body of music than ever before – and it’s catching on. Unique visitors to radio category websites has increased by nearly 19% since last year, with Pandora leading the pack at 11,824,629 in June 2011 – that’s 81% yearly growth.

Over the last few years, Pandora has made decisions to support growth of their user base and help them stay ahead of the competition, even if just barely at times. In 2008, the Pandora app became one of the most consistently downloaded apps in the Apple store. By 2010, Pandora was present on more than 200 connected consumer electronic devices ranging from smart-phones to TVs to Blue-ray players. It was in 2010 that Pandora began to break away from the other music discovery services and would attract more than double the unique visitors of, traditionally Pandora’s toughest competitor, by year-end.

In February 2011, Pandora officially filed with the SEC for a $100M IPO, piquing even more interest in the service in the months leading up to their pricing announcement on June 15th. The company’s future may not be as bright though, as innovative alternatives to radio-style listening like Spotify, Music Beta by Google and Apple’s iCloud are beginning to gain traction. While these services are very different than Pandora – and from each other – there is no doubt that they pose a threat to the current music landscape. You can be sure we’re keeping an eye on it.

So, have you tried Spotify? Music Beta? iCloud? What do you think? Are you ready to abandon Pandora?

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It’s no secret that negotiations between Google and the recording industry haven’t been going very well. Perhaps even less surprising are the reasons behind the stalemate. According to the Hollywood Reporter, discussions between the two parties have sputtered thanks to three usual suspects: money, file-sharing and concerns over competition. During licensing talks, Google agreed to pay upfront advances to all participating labels, but the major players wanted bigger guarantees. That prompted the indie contingent to ask for similar money, unleashing a snowball of stakes-raising. The two sides also failed to agree on how to handle pirated music, with the industry demanding that Google not only ban illegally downloaded files from users’ lockers, but that it erase P2P sites from its search results, as well.

Hovering above all this bargaining was a thick cloud of destabilizing uncertainty. Some execs welcomed the idea of a new iTunes competitor, while others were less enthusiastic, amid concerns that Google Music wouldn’t deliver new revenue streams. The ultimate question, of course, is how negotiations will proceed now that Google’s already launched the service. The labels were warned that Tuesday’s I/O announcement was coming, but the search giant didn’t do much to mend fences when it effectively blamed the record execs for holding up negotiations. It’s hard to say whether Google’s bravado will help or hurt matters, but according to a source from a major label, “People are pissed.”

What stalled negotiations between Google and the music industry? (Hint: money) originally appeared on Engadget on Thu, 12 May 2011 16:12:00 EDT. Please see our terms for use of feeds.

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