I see both sides of the argument, but I think that the 30 second clips need to remain royalty-free. Yes, the musicians created that music and even if it is just a clip, they should be rewarded. But, it is also just a sample. Restaurants in the mall will often pass out samples to attract people to buy a meal at the restaurant. People don’t need to pay for the sample whether they end up eating there or not. The same is true with these 30 second clips.

If the sites need to pay for these clips, that means they will either have to get the money directly from the consumers or from advertisers. Either way, this will hurt the process of music discovery as more space will be utilized for ads instead of information about music.

This also spells trouble for some online sites that are already barely making it by. If you look at Pandora, they are spending nearly 70% of their income to stream music online. And the streaming royalty rates will only be increasing in the years to come. It is not worth it to have this extra revenue stream.

Stay tuned,
Erik
erikrostad.com