Muxtape.com (an online service that allows users to upload mp3s and create digital mix tapes) was shut down yesterday citing problems with the RIAA, and I just found out why Pandora.com (a popular personalized internet radio service) has also decided to pull the plug:

Last year, an obscure federal panel 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.

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.

Having listened to the lecture podcast Music Artists Go Entrepreneurial (mentioned in my earlier post) , I got a picture of what’s happening between the music industry and the online content distributors, and how the artists (the real content owners) try to bypass them both using social media tools. It seems ironic to me that the fight is more about the ownership of the Internet, rather than the content itself.

Link: Giant of Internet Radio Nears Its ‘Last Stand’
Related Article: Playing Whack-A-Mole With The Free Music Crowd
Related Article (Update): Muxtape Is Back As A Mixtape Platform For Bands