Pandora pays songwriter $16.89 for 1 million plays

Soon you will be hearing from Pandora how they need Congress to change the way royalties are calculated so that they can pay much much less to songwriters and performers. For you civilians webcasting rates are “compulsory” rates. They are set by the government (crazy, right?). Further since they are compulsory royalties, artists can not “opt out” of a service like Pandora even if they think Pandora doesn’t pay them enough. The majority of songwriters have their rates set by the government, too, in the form of the ASCAP and BMI rate courts–a single judge gets to decide the fate of songwriters (technically not a “compulsory” but may as well be). This is already a government mandated subsidy from songwriters and artists to Silicon Valley. Pandora wants to make it even worse.

[Via DF]

  • Imnostatsguy

    I must be reading this wrong. Here is what I figure.

    1. Pandora had 1.1M plays which equals 1.1M listeners for $16.89, thats $0.146/1K listens

    2. Sirus/XM had 179 plays & paid $181.94. Sirus has 25M subcribers so if we estimate that 1% of their subcribers heard the song that is 44.75M listens which is $0.004/1K listens.

    3. Radio has 18,797 plays & paid $1373.78. There are 316M people in the US, if we assume that 50% of them listen to the radio (way low, stats I found say 93% listen), and that only 1% of those people heard the song then that works out to 1.58M listeners*18797 plays for 29.6B listens which is $0.000046/1K listens.

    This is why Pandora is pissed off, they pay for EVERY SINGLE person who listens to a song. And they pay MORE than radio or satellite. All they want is a way that they can play music & remain competitive, & when the radio is paying next to nothing to play a song Pandora feels screwed.

    • marv08

      Not sure this is a valid comparison. On radio (terrestrial or via satellite) all people have to listen to the same stuff, can’t skip songs etc. Pandora is almost “à la carte”.

      There are always higher royalties for selective use than for generic broadcasting. Services like Pandora should not be allowed to virtually dispossess rights holders (artists) by telling them what their “goods” are worth. Artists should not really bend over to meet the overweening feeling of entitlement present on the Internet.

      If services like Pandora can’t survive on fair pricing, then maybe their business plan was junk in the first place.

      • Miles

        Pandora is not a la carte – and they have to pay for you listening to the song, even if you skip it straight away, and you didn’t pick the song, you were forced to play it. There are some really poor comparisons going on here, and people misrepresenting Pandora.

      • Jim McPherson

        Rdio & Spotify have an a la carte component. Pandora does not.

        • marv08

          Pandora can be extremely specific, depending on the starting point you give it, tons more specific than any broadcasting station will ever be. It might not be “a la carte” in the true sense of the word, but it is miles away from generic or even genre-specific broadcasting stations.

          My cable provider gives me radio choices like “Alternative” (which includes pretty much everything that is not comfortable enough for elevator music) or “Jazz” (which includes everything that is not 4/4 or a waltz).

          If I tell Pandora to use very specific artists, like say Terry Edwards and the Scapegoats, a 70s Lisa Dalbello album or Klaus Nomi as a starting point for a “station”… the results contain not even a handful of artists.

          The more specific a result set is, the less it can be considered advertising – I do not expose myself to goods looking for a buyer, I consume what I would have consumed anyhow. Bottom line I only received the goods for less.

  • Jim McPherson

    The artist has fallen into the trap of exaggerating for effect. If you read the fine print at the bottom, he only gets 40% of the songwriter royalties (while the band splits the remainder), and he also gets performance royalties. Yet he headlines with the misleading numbers. Seems to be learning from tech journalists. And analysts.

    The more interesting question for me is what the labels are getting. This has always been the problem with recorded music – no matter how fair your contract may seem, the writers & performers always get hosed and the labels take the lion’s share. This is an industry-wide problem.

    Separate from that, though, Pandora deserves to be on equal footing. Maybe everyone else’s rates should be raised, instead of theirs being lowered. Maybe there’s a compromise somewhere in the middle. But it does seem clear by the per-listen numbers that Pandora’s getting the short end right now.