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CBS Cuts Back Digital Streaming Service cutting service to some countries, going behind pay wall in others

CBS-owned is eliminating its radio streaming service in most countries and putting part of its music offering behind a pay wall in other countries including the U.S. and U.K. and Germany.

It has already made the pay wall move in Canada, Australia, New Zealand and Brazil.

The additional changes take effect Jan. 15, 2013. has struggled during the downturn, and says it’s making the changes “due to licensing restrictions.”

Music royalties that digital audio services pay rise as their customer bases increases, making the current business model for many of these services unsustainable, testified David Pakman, a partner in venture capitalist firm Venrock recently during a music licensing hearing on Capitol Hill. His firm has resisted investing in digital music. “Hundreds of millions of dollars have been lost. The digital music industry has one of the highest failure rates of industries we’ve studied,” said Pakman.

“We will continue to look at the state of the market in other territories and hope to expand again in future as it becomes more viable,” said, noting the free ad-funded online streaming service, which is the core of’s business and is used by tens of millions of listeners each month, is unaffected by the changes.

CBS purchased for $280 million in 2007; it remains U.K.-based.