please remove "news" from the name of this website.

Agreed.

Don't agree.

This is definitely relevant.

If anyone has been keeping up with the recent crap about Pandora's how should I call them.. 'licensing shenanigans' at the expense of songwriters then this article should say a lot with few words.

Totally disagree.  The salaries at Pandora are about 1/5 that of any major label executive or other major media outlet.  It's getting old listening the the complaining.   Can we get pictures of the houses of the top 10 artists, 10 lable executives, artists managers, artists lawyers, producers, etc?   

other media comapies are not lobbying congress to lower their statutory royalty payouts in order to save their failed business model (from which they have profited personally).

The *labels* are lobbying congress to RAISE the rate in order to save *their* failed business model.

Let's face it, Internet music services are largely stealing ears from terrestrial radio, which pays way less in terms of roayalties.

Do some fact-checking on the cost of streaming and you'll realize that there's not much money available. Pushing for even higher revenues is insane. Dead companies pay no royalties at all.

Interesting.  Please provide a link to the bill that is being proposed in congress that raises rates for the benefit of the labels.

DMN has hardly been a credible or respectable news source lately, but this is really unbelievable. How is this news?

...and out come the Pandora trollz...

Amazing. Says everything about the situation with Pandora doesn't it.

Guess life is hard, struggling under the weight of onerous artist royalties and all.

The point of this post is not to report on the newest gossip of music industry professionals. It is to report that clearly Pandora is doing better than they claim to be. Right now they are fililng lawsuits based on the fact that they can't afford such high royalty rates. Clearly if they did some re financing they could. 

this makes sense

This is really shoddy "reporting." Did anyone bother to check where he made his money (as if Pandora must be the only source)? Are we saying that the free markets and going public is not a viable option for companies that are making money from digital music ... that different rules apply?

Take a daring, wild guess.

It Gets Worse: Pandora Executives Have Dumped $63 Million In Stock In the Last Year Alone...

http://www.digitalmusicnews.com/permalink/2012/121102pandora

This story is perfectly legitimate. I don't remember any techies complaining when Digital Music News ran this story on Edgar Bronfman's penthouse.

http://www.digitalmusicnews.com/stories/050511bronfman

The story on Bronfman is relevant, this is less. While Pandora fights for lower royalties they still pay 100% of their current rate (reasonable or not). Bronfman on the other hand held hundreds of millions of dollars of undistributed royalties for years because WMG couldn't figure out who to pay but, they certainly paid Ed!

Okay, let's state a few things.

1. People work hard, and when they succeed they are allowed to buy nice things.
2. The Pandora fight over royalty rates will be a constant one, just as fights over mechanical royalty rates are/were for the record labels with publishers on CDs, and on LPs and other physical forms of music products in the past. ASCAP and the other PRS's, and songwriters will wage fights of their own to up those rates.
3. Whatever you think of stock options, those who hold them are allowed to exercise them legally.
4. Like it or not, music listening/purchase habits have changed inextricably over past 15 years, and if Pandora economicallyremains viable or not, that won't change.

The offense is that Pandora has on multiple occasions used language that implies they are struggling and will never be profitable without lower royalty rates. Lower royalty rates means less money for musicians. It is hard to listen to Pandora whine about high royalty rates when employees are buying houses such as this one. 

Are you suggesting that employees (or founders) should not make market value salaries until a company is wildly profitable? That they should work for free? Or that they should not be trying to get their costs down to make the business sustainable long term?

Tom, Tim and the rest of the Pandora team have worked extremely hard to create an immense amount of value for artists and publishers. They've generated hundreds of millions of dollars in royalties. Are you saying they don't deserve a small piece of that value? Some recognition of their work?

It is ridiculous to say that they should not be able to enjoy some rewards for creating this company and revenue stream. There are thousands of companies that are not generating profits that are still paying employees high salaries (usually because the employees are worth it). It's just normal business.

Are you serious?!?  Market rates for the music industry payscale?  This is an indusry that compensates people pennies on the dollar for what they are truly worth and looks at the "Perks" as compensation, so spare me and this forum the diatribe about market rate...

I don't think anyone begrudges people making money--even millions--from their businesses.

But I think you're missing the point of people's annoyance and outrage.

Westergren is pleading poverty in the press. He's openly complaining that things are tough for him and his company; that the rates are unfair and unjustified and that he needs to pay musicians less.  He's even suing a PRO to pay songwriters less.

If he's going to publicity and vociferously talk about how his company is getting the shaft (in his opinion) and how running the company is a financial hardship, then he should probably send the memo to his boys that maybe they might not want to brag about their multi-million dollar summer homes on facebook.

It's tough for anyone to empathize with Westergren or Pandora--or see their point of view--when he and his boys are living the one percenter lifestyle.

"Meet the new boss, same as the old boss"

But I know, professional musicians are so much better off now than they were 20 years since those evil record companies are mostly gone..... :(

wow. some people got rich through legal business in music?

their success must mean that they've stolen something from the rest of us, right?

should we pillage the home in the name of justice?

or do musicians volunteer their music for Pandora?

shouldn't that house belong to me because I made some songs that I like?

You make no sense. Artists make the music, so they should get the money involved.

I make music too. should we initiate the command-economy starting now?

Also, and I ask this in all earnestness, isn't all music on Pandora there voluntarily? i.e. don't artists and/or their representative volunteer the music to Pandora? aren't artists & their reps free to withold their music from Pandora?

No. Not all the time. Pandora accepts submissions so long as they can procure it from Amazon. To get play on Pandora, a physical copy has to be for sale on Amazon.

Tom Conrad may be a very intelligent human...but he's an idiot for posting this on FB. Hope you enjoyed your 250 likes bc now the whole world knows your a dbag. Good luck with your lawsuits Pandora. Might want to put a bag on that hoe.

Real Talk

When a company goes public, the executive team become politicians. Pandora's CTO is a lousy politician who enjoys social media fame, and has for quite some time. Not a good strategy for politics, not even the pundits. 

Westergren, on the other hand, is an excellent politician.  

DMN exposed that Tom Conrad is a d-bag. Now what?

Note the date on the FB post was June 10th.  I've never looked at this guy's page... no idea how often he posts.  The context is out of joint... maybe he had to fire the poolboy, lawnguy, jointroller, etc since then.

Ok Tom. I guess one section is for him and the other for Musicians and Artists who need more royalites. Not to smart Tom. I'll be canceling my subscription!

Really who cares. Without Pandora artists and labels will cut off yet another income stream and make even less money. Stop vilifying Pandora and try to make a model where everybody benefits. If Tim and Tom say they cannot sustain the model and Pandora closes, their shareholders and their investors will all lose money as well as artists land labels. Its in evrybody's interest to figure out a workable plan.

hello fanboy! you're either a victim of pandora's box or you just don't understand how this works. if pandora fails, i heart radio will just buy pandora's scraps and the general public will still have internet radio. the shareholders may lose money but the public (music fans) won't suffer, not even a little. neither will artists, because whoever buys pandora's tech in the event that it tanks will still have to pay royalties. artists won't lose anything if pandora fails. the technology won't disappear but their failed business model will. Their founders won't lose anything but their reputations, which shouldn't be a problem for someone lucky enough to buy a summer home. But who knows, this guy is clearly an idiot for not realizing his Public Relations blunders and people like that usually care a whole lot about what other people think. That's why they post this crap, right?  

The public won't suffer if there is consolidation in internet radio like there has been in AM/FM? You really think that Clear Channel will be better for the artists *or* the listening public than Pandora is?

No one is bothered that Bob Pittman (CC CEO) makes a salary of 2.6 mil a year on top of his stock options?

Hoping that Pandora will fail, Clear Channel will buy up their assets and magically start paying more in royalties is a fantasy. You forget that CC is one of the signatories on the IRFA.

Well said. Time to stop vilifying Pandora and float a compromise proposal. MusicFirst never mentions that the rates will keep going up and up for Pandora (as they have been).

MusicFirst, et al: Why not float a proposal that keeps Pandora's rate at where it is currently? That's why they're fighting; they want a stable royalty environment. Why not make a serious counter-offer on the rates? Why not propose changes to the IFRA? Strike out all the parts you don't like, add in some verbage you do like?

Unless I am mistaken, Pandora is free to negotiate direct deals with rights holders if they want to.  If Pandora beleves that they are delivering more value to the rights holders than they have to in order to secure the rights to play the music, then they are free to test that theory with direct negotiations. 

But they don't want to test the free market b/c they know that every major label (and the larger indies) could 'hold them up' at gunpoint and essentially cripple the service if they don't get what they want.

At the same time, Pandora has known for a while that the rates were going to be set at a specific price per stream, and rise over time (well before they went public and hyped up the stock).

I'm actually surprised that they haven't been sued by shareholders yet for saying that the business was worthy of investment before the IPO and then saying its a failed business model immediately after the IPO - all the while mgmnt was profiting handsomely from the IPO.

Regardless of which side you sit on, one thing is for sure that the management of the company has failed to put it into a position of strength - relying instead on a prayer that the US congress would issue them a 'bailout' by fiat.  This is not a position that a strong management team would put a company in.

Time will tell if congress will reward this kind of mismangement.  But I have to agree that rights holders will not suffer if Pandora goes away.  The idea that people would simply listen to less music if Pandora disappears is ludicrous.  They will simply shift their listening behavior to other channels - some of which will payout more to the artists (itunes) and some which will payout less (spotify, terrestrial radio).

There are claims that SoundExchange is coordinating with labels to keep them from negotiating direct deals. (Direct deals are also bad for the artist, and the AFM wouldn't get their 5% take, but that's another long story)

SiriusXM has a lawsuit against SoundExchange over this very thing.

There is language in the IRFA to keep SoundExchange and label groups from coordinitaing in this matter-- just like SiriusXM is trying to do with their lawsuit.

So there really isn't an easy way for Pandora to make direct deals at this point.

Agree with you Rusty. I think it's time for the strong IRFA opposition to find better attorneys and lobbyists and a few congress people. Pandora's business model may not survive it and it may take one year+ to hit the floor but it will solve these issues and create a stable environment and encourage innovation around better business models. 

This is why our Representatives often vote against one bill prior to voting for it. Now that its up to the people and their reps to vote, and we are in a lame duck session,  it's prime time to find artist friendly and technology friendly reps to change the bill. Wrote this with thumbs please pardon typos. 

So now we're taking Facebook posts--not a press release, not publically released information--and using it to make our points? This is beyond unfair. 

Pointing out that many members of Pandora have gained great personal wealth while claiming they don't have a path forward *IS* legitimate. There are many sources for this, including tax and corporate filings. 

Trolling their personal Facebook account to demonize this man? Disgusting. 

Murrow,

Not publicly posted?  

All I had to do was search Tom Conrad on Facebook, then look at his pics.  I'm not friended by him, it was totally out there.

/paul

Am disgusted by the number of people defending Pandora over this. Does the guy have the right to work hard and buy a house, of course. Do they get to use other people's hard work for next to nothing so they can buy that house. NO! Pay the damn pennies in royalties that are owed to the people who's product you use to make millions. It really is that simple.

In Tom Conrad's defense, the technical infrastructure behind Pandora is very complex and they've done an extremely good job at having excellent uptime. Conrad is the guy who got Pandora on to so, so many hardware and automobile platforms. Plenty of other internet companies with similar infrastructure have made even more for their CTOs who have arguable done less.

I don't see people complaining that Mark Zuckenberg made tons of money off other people's writing and photos on Facebook. Or how rich Reid Hoffman got off other people's resumes with LinkedIn. Not to mention the MySpace founders who also made mint "off the back of artists". Artists and labels: how much money did you make off MySpace compared to Pandora? How much do you make off YouTube compared to Pandora?

What's going to happen to SoundExchange if Pandora closes down? That's where most of their money is coming from now.

There are plenty of artists being played on Pandroa who own fancy houses, cars, jets, etc. Why aren't they being demonized as well?

This "war" between "artists" and "Pandora" is more based on emotion than fact. 

If you want to see where this is going look no further than what happened to Hostess.

Seriously? This is getting so petty. Shame on you DMN.

It's just a picture of his house.

You may not make a bundle Grizzly Bear but look who does...

The volume of  commentary that this post generated validates its news value. Res ipsa loquitur.