MP3.com founder Michael Robertson has a suggestion for the NAB. Robertson says the NAB should ditch the Al Queda angle and pay the cell phone companies $1.00 for every phone that rolls off the assembly line with an FM radio chip in it. Robertson believes money talks and the NAB should give up the community safety angle. "Go with the greenbacks." When told of Robertson's suggestion Emmis CEO Jeff Smulyan said "I'm open to any ideas, but it's really interesting that most new phones already have the chip installed but not activated. I'm told that globally, it's hard to find chipsets that don't have FM in them." Smulyan has been one of many radio executives pushing to get the FM chips installed in cell phones. But Robertson has more to say.
Robertson says the Internet radio model will not work. "Royalties for Internet radio makes it impossible to be profitable and anyone who says they are making money is fudging the numbers." As an example Robertson pointed out that the fees for Pandora go up 9% every year with their "royalty discount" ending in 2015. And that's the big unknown for companies like Pandora. What happens in 2015 and will they be generating enough revenue and profit to make the business viable over the long run. It's one thing to provide a free service that everyone loves. It's quite another to be a public company, required to generate profits to satisfy investors.
Robertson has launched a new service called Dar.fm. The service allows users to record their favorite radio stations or radio shows for playback at another time. Robertson created MP3.com and then sold it for $400 million.
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