Tough Love for Employees and Pandora's New Deal

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The deal that saved online radio. Pandora, and other Internet radio sites, are breathing a sigh of relief today, one day after record labels and online radio stations struck an agreement that will reduce per-song royalties for streaming music. In March, we told you about how Pandora founder Tim Westergren built a grass-roots campaign of web listeners that pressured Congress into getting involved. The move seems to have worked. The old royalty system would have required web-radio players to pay royalties of 19 cents per listener, per song next year. Westergren and other web radio leaders said their businesses couldn't survive under the weight of those fees. Under the new deal, web-radio players with annual revenue of more than $1.25 million must pay either 25 percent of gross revenue or 9 cents per listener, per song -- whichever is greater --, The Wall Street Journal reports. Smaller sites will pay the higher of 7 percent of expenses or 12 percent for the first $250,000 of revenue. Still, it's not all good news for Pandora listeners. The company announced that those users who listen for free for more than 40 hours a month, will now have to pay 99 cents once they pass that number. Click here for our 2007 cover story on Pandora's crazy ride to the top of online radio.

IOU's are California's new legal tender. The state of California is in pretty bad shape, fiscally speaking. A still-unresolved $26-billion budget gap led the state to issue IOUs in lieu of actual payments on their bills last week. The San Diego Union Tribune reports that a bill currently moving through the legislative process would allow business owners to pay taxes using the the IOUs. Registered warrants, as they are officially known, are already accepted as payment on income tax, but the bill would broaden their acceptance to allow IOUs to pay off any kind of fee owed to the state. Since Thursday, the first time California has issued IOUs since the Great Depression, about $230 million have been distributed in IOU form, according to the San Diego Union Tribune. The bill's author, Assemblyman Joel Anderson, explained, "To expect them to pay the fees and taxes, when they have yet to receive cash payment from the state is outrageous."

Telling employees to get healthy or else. Interesting story in today's Wall Street Journal about one company who gave the following ultimatum to it's employees: get your medical checkups or lose your health insurance. Tired of skyrocketing healthcare costs and the lackluster employee participation in the company's voluntary wellness programs, AmeriGas Propane made the decision to enforce some tough love. Employees and their covered spouses were given a year to complete a battery of health checkups, including blood pressure checks and blood-sugar tests. Those who failed to complete the tests would lose their health insurance. Despite some grumblings from employees, and some legal concerns over privacy issues, the program seems to have had some early success. 90% of AmeriGas workers have gotten the required tests. One employee discovered early-stage breast cancer from a required mammogram, a test she said she would likely have put off had it not been mandated. For an admittedly unscientific test of how healthy your workforce is, take a look at our office wellness quiz.

The unexpected hero of the upcoming Facebook movie. ScriptShadow got its hands on the first draft of the Facebook movie, directed by West Wing creator Aaron Sorkin, and finds the mesmerizing script centered around an unlikely hero: Sean Parker, an early investor in the social network. Parker, who also co-founded the infamous file-sharing startup Napster, is given credit for pushing Facebook founder Mark Zuckerberg to rev up the company's growth. Defamer quotes ScriptShadow's Carson Reeves, "And don't get me started on Sean Parker - a character that can become iconic if the film is made. The brash techy rock star revels in his own ego, and is a key player in why Facebook is on our computers today." Comparatively, Zuckerberg is portrayed as more of a dweeb. In one wrenching scene, he sits alone in a dark room and "friends" the ex-girlfriend who dumped him right before he launched Facebook. Overall, thanks to Sorkin's screenwriting prowess, viewers can expect the story to be something of a comedy.

Google's new operating system. The rumors were true. In a move that has anti-trust regulators on the edge of their seats, Google announced on it's blog last night that it will develop Google Chrome OS. The new system will allow applications to run directly on the Web and will be installed in the second wave of 2010 Netbook models. Sundar Pichai, VP of Google's product development, said, "We are going back to the basics and completely redesigning the underlying security architecture of the OS so that users don't have to deal with viruses, malware and security updates." Recently, WIRED chronicled the deep-seated competition between Google and Facebook as they vie to control users' Internet experiences. Could Chrome OS be Google's knockout blow?

Entrepreneurs by the numbers. A new study from the Ewing Marion Kauffman Foundation, dubbed The Anatomy of an Entrepreneur, provides some insight into what makes the founders of high-growth companies tick. The answer? Coffee. Lots and lots of coffee. Just kidding. The study looked at the socio-economic, educational, and familial backgrounds of 549 successful entrepreneurs and determined that most of the company founders are experienced, well-educated and married with children, and that they come from middle- to upper-lower-class backgrounds. The full study can be downloaded from the link above.

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Last updated: Jul 8, 2009




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