Wednesday, April 6, 2011

Broadcasters: Keep An Eye On The Pandora Subpoena

From Ed Ryan,
Popular Internet radio company Pandora says it's not the specific target of a grand jury investigation after being hit with a federal subpoena. Apparently, the government wants to know how private information is being used by third-party companies that have relationships with app creators like Pandora. Especially if those relationships involve a user's private information being used in a way never approved by the user.

Sharing information about a user without proper notice or authorization could violate a federal computer-fraud law.

Pandora reported the subpoena in an update to its earlier IPO filing with the SEC -- and acknowledged that drastic changes to the way it's allowed to pass along user information could damage its revenue model, something that has to be spooking just a few people planning to invest in the company as it gears up to go public. One of the changes that has Pandora worried is a potential "Do Not Track" list. Such a list "could significantly hinder our ability to collect and use data relating to listeners," the company said.

"Do Not Track" is the online version of the Do Not Call list, which basically put an end to telemarketers calling you at home while you're eating dinner. The Federal Trade Commission has proposed the creation of "Do Not Track" to let consumers limit or block advertisers that study online behavior to target ads. The tool would most likely take the form of a Web browser setting that travels with a user from site to site and informs websites when tracking is off limits....

There is some speculation that the subpoena is part of a government attempt to establish some sort of guidelines for information-sharing. As far as radio goes, several companies already have apps out there, collecting data. When you download Clear Channel's iheartradio from the iTunes app store, the first thing it says is "iheartradio would like to use your current location. Location services are used to locate your local stations." There has been a lot of chatter in our business about getting on the "radio personalization" bandwagon, and the revenue idea discussed most is the ability to target ads to the user. Should radio groups with plans to target advertising to consumers online now be worried about the government coming after them?
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