Pandora says they're generating millions for artists like Drake. But what if they're actually taking millions from those same artists at the same time? That's the more complicated scenario now being etched by NPD Group, which recently found that Pandora is aggressively reducing CD, download, and other more 'traditional' music listening behaviors.
This is actually part of a broader trend related to streaming in general, across both the on-demand (YouTube, Spotify, VEVO) and non-interactive radio formats. Simply stated, access is continuing to take a bigger piece, often at the expense of discrete ownership.
But within that streaming soup, Pandora is a major chunk of stew, with in-car listening having a dramatic impact on in-dash CD and MP3 listening, not to mention traditional AM/FM radio. "Since 2009, the percentage of Pandora users who also listened to AM/FM radio declined by 10 percentage points, those listening to CDs on a non-computer device fell 21 percentage points, and listening to digital music files on portable music players also dropped 21 points," the research group found.
The finding complicates an already convoluted argument coming from Pandora cofounder Tim Westergren, simply because more traditional formats pay far better than any streaming platform - by a gigantic margin. In recent presentations, Westergren has asserted that abnormally high and unfair royalties are impeding Pandora's ability to generate larger amounts of money for participating artists through more innovative, non-advertising based ideas.
Casey Thursday, November 08, 2012
It really doesn't complicate things at all. A decrease in listening to music people buy has little to nothing to do with the actual sales. There is no evidence in this study at all that sales are effected, and severl studies that say Pandora actually increases sales, but that is another matter. Actually, one could argue artists make more this way. How much money do artists make from people listening to the music they buy? Zero. Pandora does pay per play, every time. So as long as sales remain steady, artists are coming out ahead.
As mentioned, this study did include Spotify, Youtube, Etc. So the study did not actually mean anything at all in relation to Pandora. Those are on a completely different playing field than Pandora.
ffs Thursday, November 08, 2012
what utter drivel ^
Visitor Friday, November 09, 2012
so Pandora is cannibalizing transactional business but Spotify is not? Really?
R.P. Friday, November 09, 2012
someone just started reading The Innovators Dilemma. Unfortunately, itunes pretty much "cannabalized" the CD some time ago. Pandora, or better yet spotify is technically attempting to cannabalize the mp3 as the disruptive technology that it is.
Good try though...
Slow down there Evil Kenevil Friday, November 09, 2012
You are jumping to a lot of conclusions and I don't want you getting hurt.
If you listen to Pandora in your car, it seems more likely that Pandora took your listening time away from an AM/FM station, or XM/Sirius, than from purchased media. If that is the case, copyright owners received more money for that consumption than they otherwise would have generated. That's because Pandora pays much, much, much higher per song listening rates than over-the-air AM/FM or Sirius.
Also, how about checking in with Pandora and finding out how many times per month that "Buy" button that is included next to every song is pushed. In 1.25 billion hours of listening each month, assuming 15 songs per hour, that means the buy button was displayed 18.75 BILLION times. I bet some people push it, and actually buy something from Amazon (for CDs) or iTunes (for downloads).
lifer Friday, November 09, 2012
Taylor New Orleans Wednesday, November 14, 2012
I agree with Casey (above) and add that this
study only shows an effect. There are an unmeasurable number of causes
for the decline of CD/MP3 sales. I do not believe that Pandora is "taking
millions from artists" they pay in royalties because Pandora has created a
direct revenue stream for the Artists that otherwise would not exist due to the
listeners ability to get CD/MP3s they want to hear for "free" using
Whether we like it or not, one cause of CD and MP3 decline is the availability of "free" music. Whether it's links, burns, shares, dropboxes, or torrents . . . one way or another music is attainable at no cost. Pandora fills in the gap where listeners are not spending money on music by providing a royalty payment to the artist.
Similarly, Spotifty, I also believe, has created a "gap filler" of revenue to the artist would otherwise be absent. When in my car, I listen to NPR on FM or to Spotify via an AUX cable that plugs directly in to my iPhone. (A service I pay $9.99/mth for). Previously, I used to listen to iTunes via AUX, however, notably, very few (if any) of the songs on my iTunes had been purchased. Most of that music was acquired through shares from friends or torrents at no cost. As such, Spotify created a way for me to pay for music I wanted to hear - music that I otherwise would have acquired for free.
Ultimately, though the sale of CD/MP3s may be going down, I think that, thanks to Spotify and Pandora, the amount of individuals that are in some way or form paying the Artists is going up.