Wednesday, November 28, 2012

Pandora and Artist Royalties..

Will rationality win the day when it comes to artist royalties and Pandora?
or….does it all just come down to the:

Let's think outside of the box, Pandora...

Dear Pandora-

   I was sorry to hear that you are lobbying against artists.

 "Internet broadcasters led by Pandora are pushing Congress to pass the Internet Radio Fairness Act which could cut related royalties paid to musicians by as much as 85%." (   It appears that so-called 'fairness,' doesn't have much to do with this act.  Pandora is set to follow the way of commercial and satellite radio before it.

    Artists continue to be pushed to the back of the line when it comes to fair payment for their music. Whether it was major record labels and commercial radio in the past or Pandora now, bottom lines are driving the decision making of for-profit internet streaming services as they continue to grow.  That's all fine, business is business, but I believe it is important that Pandora works with artists, established and emerging to form an equitable vision for all involved.

   Normally, I would support the streaming of my music and the music of other like-minded musicians, but I also believe in fair pay for my work.  An 85% pay cut, seems steep to me.  Granted, it's nearer to what commercial and satellite radio pay on artist royalties, but that doesn't make it fair for artists.  Many more artists are able to create and make a living out of their music at this point in history than at any other time. Don't take a step back in time where exploiting artistic work in the record industry was the norm.

   My music is not available on Pandora, and I will continue to see that it stays that way, until Pandora works with artists to support them (like it once did), not exploit them.  It's time for artists and distribution services to work together.  Let's not fall into the same patterns and 'boxes' that artists have been trying to escape from for so long.   

Tim Westergren Founder of Pandora Responds

Hi Neal,
Thanks for taking the time to write. This is an issue I take very personally.
I spent about 15 years of my life trying to make a living as a musician, so I am intimately familiar with the challenge of making ends meet, and I know that the digitization of our industry has made it doubly hard, as the CD has experienced such a steep decline. Supporting musicians is a central mission of Pandora and we pay royalties proudly.
While at a glance Internet radio’s efforts to lower its royalty burden may seem like yet another setback for artists, we don’t believe that’s the case. In addition to a basic issue of fairness, we would contend that a more reasonable royalty for Internet radio will greatly accelerate its growth leading to much larger royalties.
Currently, there is absolutely no question that Internet radio’s growth has been greatly slowed by the unequal royalty burden it shoulders. Those rates have pushed the three largest internet radio companies (AOL, Yahoo, MSN) essentially out of the business, and they have also precluded most broadcasters from entering the market place with any vigor.
We’re not seeking the lowest possible royalty. We want something fair. And to us, fairness means allowing us to be governed by the most prevalent, long-accepted royalty standard (called the 801B standard) that has governed copyright administration for decades. In fact, record labels and songwriters have used and accepted this standard themselves in their own rate-setting processes. We don’t know what the outcome of a new standard would be, but the criteria under that standard strike us, and many before us, as reasonable and balanced.
I hope this helps at least clarify our thinking. We think there is a win-win here, but it requires both sides taking the long view.
Thanks again for writing in.

Re: Pandora


I really appreciate the reply and your perspective on the problem.  Your response really does mean a lot and you will have my ear in this situation.  I will post your response on my blog and website.  I think it provided a perspective on what you all are facing at Pandora.  I'm am an independent musician and as much as I identify as an artist, I also realize that much of this debate hardly involves me and my non-existent royalties anyway!

I do understand that entities like the RIAA have you backed into a corner with very little room to make a profit or even allow for the expansion of the streaming industry.  I also believe that Pandora provides an amazing service to musicians as a way to be heard and discovered.  My fear is that Pandora or internet streaming services may go the way of big media, something more like Clear Channel, where there is little to no room for the great undiscovered music that is out there, something I fear Clear Channel has no idea even exists.

Your response gives me hope that there are people involved in the Internet streaming business who do listen to the small voices out there.

In the past few months, I've been reading media futurist Gerd Leonhard and yesterday in an attempt to gather more information, I found this YouTube video dated 11/9/12 where Gerd and Tom Davenport of the Guardian talk about the situation Pandora and Spotify are facing.  It really helped me re-form my perspective on the issue.  Thanks for the email reply and I hope you will continue to keep artists and creators in mind as this issue develops!

Thank you, 

Re: Pandora

Thanks, Neal.  Appreciate it. 

You're right that a flawed royalty system could have the exact consequence you've described. 

Hopefully rationality will rule the day.