Tim Westergren, Pandora

Here’s how I think of this idea. My guess is that ISPs will be very reluctant to raise their prices unless they are getting a very substantial portion of the increased revenue – that will bump into the revenue requirement that labels need to have for any all-you-can-eat service, which is inherently substitutional.  If there is no meeting of the minds on the rev split, I would assume it would have to be an elective add-on.  In that case, it becomes another subscription service.  The history of the subscription business in music is not a healthy one.

I also don’t believe the record business can sue its way out of this situation.  I believe that the answer for labels lie in supporting business models that enable ad-supported, free to consumer offerings to thrive.

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