There is no room for a new physical format (as some at NARM discussed) nor is there room to squeeze radio for royalties. The bigger debate here is how companies like Pandora and Last.fm are building companies they’ll be selling off to Viacom, on the backs of labels and artists who receive a pittance of compensation for streaming of music.

The NAB lawyers can beat up the RIAA lawyers any day of the week. The NAB is tight with congress.

Terrestrial radio isn’t going to have to pay.

There is a point where playing the music has a positive effect for the labels… that’s why payola became important as a business technique. If it wasn’t important for certain outlets to play the music then labels certainly wouldn’t pay them.

On the other hand…

Over saturation of music doesn’t help labels or artists. There have been recent studies that shows how internet radio such as Pandora, Last.fm, Rhapsody streaming and other services actually decreases the amount of music bought. It makes sense. If most of your music needs are being filled by these fantastic services that keep you entertained 24/7 then why buy? Sure, the obscure indies benefit from that but the majors, who make the bulk of the content, certainly don’t benefit in a proper fashion.

Any way it goes they are building businesses on the back of artists. When I see talk about these companies getting snapped up for tens or hundreds of millions I think about all the starving artists left out in the cold who made it possible for them to get sold for those multiples.

The compensation plans need to be worked out and as you said the government should let the market decide this one. The time for government regulation has passed for music related issues… and, judging by the video problems, maybe all other digital content as well.