Wrong answer. Pandora pays them $0.000. That is what they are paid by the PROs.

Although it is fascinating.  Each one has a different amount of pay per song by a very large margin. Now why is that? Why are the PROs paying such a different amount? Obviously there are reasons for it. Being cowritters would probably have something to do with it. Whatever the reason, it doesn't have anything to do with Pandora.

Correct.  More writers splitting the money.  Depends on the song.  These slides don't show shares.

Dear first visitor,

I appreciate your comment, but I'm not sure that it's entirely accurate.  

These aren't royalties based on simply what has paid by the PROs, but also what is directly licensed or paid to Music Reports.

As I'm guessing you're illustrating why some are paid more than others, Linda Perry's "Beautiful" is a 100% non cowritten song.

Considering that, these royalties are unsustainably low for both sides as Pandora is poising itself to bankrupt its suppliers while reaping huge profits.  

The listeners shouldn't be affected by this, however Pandora has a moral and long term financial obligation to share its wealth more equitably now that it is in a place of significant profitability.

If artists or song writers depend on Pandora as their main or sole source of income, then they deserve to go bankrupt.

And Pandora is not profitable. At all. If you pick up a penny of the street you will make more profit this year than Pandora.

Great!  Than Pandora should shut down it's crappy service that screws musicians instead of wasting money and time trying to legislate lower and lower rates. 

I fully agree with this view!

criar twitter

You're either a paid shill for the industry or some untalented loser who sits on bittorrent his whole life with no prospects of a date, and likes to rail against people who do have talent to peddle to the world.

Go watch a PUA video, and try to get a date, instead of posting your whining nonsense across multiple blogs.

@ Casey; Quote "That is what they are paid by the PROs. Although it is fascinating.  Each one has a different amount of pay per song by a very large margin. Now why is that? "

If the money is coming from the PRO's (and not directly from Pandora)

then the answer is because of the collectives messed up Terrestrial radio and CD sales favoritism..

The collectives 'might be' using Pandora's reporting numbers, but NOT in any 'real world' sense..

and it gets worse.. the same collectives also collect a huge chunck of money from all the venues (bars, halls, restuarants, etc etc), but none of the venues have to report what songs are being played.. so again, the % of money being paid out per artist is primarily the jurisdiction of Terrestrial Radio..

The problem here isnt all Pandora.. the PRO's are also part of the issue..

How much are they paying the licensing agencies for these songs?

Especially if these songs are co-written, showing one writer's income from the plays after the payment has already passed through the licensing agency is incredibly misleading (not that it's being done intentionally).

The real number is the payment to the PROs - is this number available anywhere?

I guess my biggest question is what do they think they should be paid? Those payouts obviously look extremely lopsided but what is the reasonable preferred payout? Even half a penny would be a significant amount of money, but I feel like the IDEA of getting half a penny would still be an issue for people. But that would most likely make these services even less sustainable than they already are, as well.

There are legal rates for perfomance royalties to copyright holders. Obviously they are not being adhered to.

Pandora is a joke. Of course it's not sustainable - they offer a free version which is highly usable, which many people are completely fine with. Does anyone seriously think this can work by paying today's statutory rate. There is no way they should not be charging subscriptions for everyone, or collecting large ad revenues. No...instead they will go to Congress to request paying a lower rate than they are already (apparently) not even paying. Yes, the PROs are in the middle. But, come on, those numbers are laughable.

I wonder what kind of salaray the Pandora execs are making.

The PROs are not part of this at all. Pandora´s battle at Congress doesn´t really affect songwriters.

As far as the free version, they are competing with free services. Cutting the free service is suicide. Making more ad revenue is simply not that easy.

Ssssshhh..

Actually, Pandora pays to SoundExchange, and in 2009, after much hand-wringing about the high rate of royalties they had to pay, Pandora (and other "internet radio") got a reduced rate from SoundExchange.

At the time, Pandora's CFO crowed that this solved the "royalty dilemma" for good. That is, they woudl now be able to be profitable. 

Fast-forward 3 years later - Pandora has never been profitable. Their business model has failed. But they want artists and songwriters to subsidize their failed model.

That's pretty much the full story.

S-H-U-T Pandora down.

It's a shitty, not-sustainable business model.

To answer the question above, the royalty rate should be identical to that used for over-the-air broadcast radio.  No different.  End of discussion.

Absolutely!!!! Best idea you have ever had. Pandora would not have to pay artists... anything. Only songwriters/publishers. The company would be extremely profitable and very sustainable.

It's a razors edge, songwriters would win if the PROs were paid the $.15 to $.18 cents a spin of their songs on Pandora and that would be competitive with the going rate at Commercial radio.

Congress should address the fact Pandora and internet broadcasters honor the Performance Royalty concept and force commercial radio to adopt that as well.  Commercial radio has resisted this for years and Republican broadcast corporations have called it a 'tax'- which it's not.

Imagine if anyone streaming or playing music paid the the same thing- $.15 to $.18 to PROs for publishing and $.15 to $.18 to Soundexchange for Performance royalties.  Musicians and the industry could actually have a good revenue stream.

Let me explain why Pandora is a suicide business model- the unique stream concept is what is killing them.  Their Music Genome programs music with no viewpoint- which is something you get from some over-the-air broadcast entities.  Anyone investing in Pandora had to laugh initially at the concept of creating all those unique streams at the going royalty rates for over-the-air broadcast radio.  I can't believe any investors would still be throwing Pandora money at this point.  It's a money-pit.

Entirely agree.

What would be the number of listeners for a song played on a popular, over-the-air, "traditional" radio station?

For example: in the slides, Kara Dio Guardi reports (round numbers) 5 million Pandora plays of the song "Sober" netting her $20.

Let's speculate that, in conventional radio, 100,000 people hear the song on each spin.  (And I emphasize, that number is just a guess, and I welcome refinement.)   So, 50 plays on that conventional radio station reach the same 5 million listeners.  What is the payout for those 50 conventional radio plays?

(Non-snark question, this is stuff only people in the biz, without an agenda, are going to be able to answer.)

That's an interesting question.

However, that's not how it performance royalties work, traditionally. You probably already know that, but the number of ears is never counted. You pay for the right to perform (play) the recording in public. 

I guess this could be an argument for a revised royalty rate for streams, but it's a slippery slope. What woud prevent someone from streaming to a transmitter and broadcasting the performance worldwide.

I didn't know that "ears" were never counted, not at all, until I looked at BMI's site explaining, a bit, how airplay royalties are calculated.

It's frightening.  :-)

At the risk of grossly oversimplifying:  all the money paid by "traditional" radio stations seems to go in a pot, and then shares in the pot are paid out on a formula based on total spins, and then there are bonuses for a "hit" ( > 95,000 station-plays in the quarter), and a "classic".

But, if one were to speculate as low as 1000 ears per station-play (grossly low in major cities), then a "hit" on traditional radio was heard by 95,000,000 people, or almost 20 times the ears who heard Kara Di Guardio's track which I cited as an example.

Here's another way to try to map Pandora to traditional radio:

How do these algebraic ratios compare:

Pandora audience share / traditional radio share

Pandora payout for song X / traditional radio payout for song X

"all the money paid by "traditional" radio stations seems to go in a pot, and then shares in the pot are paid out on a formula based on total spins"

Yep and it pays for the band to do some serious weekly tracking of spins at radio.  If you're doing a college radio campaign, paying to have this done ensures you can audit your PRO at the end of the year in order to get fairly compensated for spins you received.  Major labels know to do this, indie acts and indie songwriters do not.  Typically, if you can provide adds/spins/call letters for your record, then the PRO can pay you an estimated amount based upon that.  It takes WORK to do this.  

It's quite a soup of different rates and percentages, and I routinely find experts flummoxed by the complexity.  Try stacking terrestrial radio, satellite radio, digital simulcasted terrestrial radio, and Pandora against one another, and you will be throroughly confused by all the various rates and details.  

To the earlier comment related to commercial terrestrial radio, yes, the PROs have very complex formulas for determining these things.  Digging deeper, the Brabec brothers have a very detailed summary of radio payouts from ASCAP and BMI, which shifted at some point to higher payouts for hits and recently-added stuff (I could go on).

At a top level, I think you can make generalizations based on the information, and work off of that.  Pandora pays a higher rate relative to streaming terrestrial, terrestrial (straight broadcast) pays zero for recordings, etc.

/paul 

The cited songs all seem to be at least 3-4 years old, which means that unless they have become classics, as pop songs, they're past their sell-by date, even if they were hits around 2009.  

Let's see some songwriter payout numbers for indisputable classics and some 2012 hits:

"Gangnam Style"    :)

"Stairway to Heaven," an undeniable classic

A few Beatles tracks

Some Taylor Swift songs, to pick an arbitrary current star, and maybe Mumford and Sons.

These numbers are disgusting. :(

Pandora paid them nothing! They received from the PRO's, not from Pandora. Paul, you should be asking how much did Pandora paid to PRO's for these titles. I would love to see that Pandora Royalty Statement to PRO's.

I agree. If the songwriters are going to make their argument they need to quit playing with these murky numbers. These "plays" vs. "pay" numbers completely leave out what percentage of the composition they own. Not to mention, I am pretty sure the PRO's have a pipeline lag on payments (anywhere from 6-9 months), so comparing a BMI Jan-Mar quarterly payment to a Pandora Jan-Mar play count is factually incorrect. Audit your PRO. Get an apples to apples number, then ask your PRO what they got paid and how they split the amount they receive from Pandora (whether it is based on a sample or actual playcounts of compositions).

I am all for an open argument on this, but let's get the facts straight first.

I agree that these are paid by the PROs or by SoundExchange right?  Pandora does not make direct payments to the artists.   

Are these numbers the artists portions for the sound recording performance from SoundExchange or from the PROs for the composition side of things?

The total amount that Pandora pays for these spins on both the composition and sound recording side should be shown to really get a good picture.  Also, show how much is kept by the PROs, goes to the songwriter, goes to the label, goes to SoundExchange, etc.  

Only a real breakdown will let anyone get a clear picture of the issue.

I have had personal issues with the management at pandora. I have had multilpe email conversations with the "staff" and music programmer. They had turned our music down( I am not sure why), Yet at the same time Jango Radio, now Airplay?.. played our music but we never recieved a penny. But,... Whotune Internet Radio was absolutley fantastic. We were at there #1 spot for almost 4 months....Yet we Still never recieving a penny. Finally we (Lebish/Grinnell) joined ASCAP as publishers and writers.

My Question is; Does ASCAP monitor internet radio? This is a very frustrating.

Wut's Pandora? What do you expect. These writers get paid from all sorts of sources. They won't put those figures up.

ASCI, BMI, and SESAC (the PROs) monitor the traditional music channels - which includes broadcast radio, bars, concert venues, and restaurants.  Radio stations pay an annual fee to each of the PRO organizations.  Each station submits a log of which songs they played and how many times they were played to ASCAP and BMI.  Those organzations use the number of song plays to determine how much to pay the registered song writers and publishers.  The total listenership of the broadcast audience are not used in the song writer payment calculations.

As song writer you have to register with either ASCAP or BMI or SESAC if you want to participate in broadcast royalities.

Here's a good article on BMI http://www.nytimes.com/2010/08/08/magazine/08music-t.html?pagewanted=all

Other organizations monitor internet radio, satellite radio, and cable music channels. 

You have to register with SoundExchange to participate in royalties from those channels.  SoundExchange collects fees from the internet and satellite radio station and distrubute royalties.  http://www.soundexchange.com/

The Harry Fox Agency is another organization that collects and distributes music royalties.

I know you tried ... but you're just a little off ...

As a SONGWRITER you have to register with ASCAP, BMI or SESAC (PROs) if you want to participate in broadcast royalties. However, that's not where their services end ... they also license, collect and pay on internet radio, satellite radio, cable channels, clubs, bars, grills, restaurants, and every other place music is used to stimulate profit for the user.

If you are a writer and self publish, be sure to join one of the PROs as both so you receive 100% of the performance royalty due.

And, actually, the total listenership of the broadcast audience is, in effect, used in the songwriter payment calculations.... because, the larger the audience, the larger the advertising revenues broadcasters take in ... and advertising revenues generally determine the fee paid by broadcasters to the PROs which, in turn are paid to writers (and publishers) based on the songs played.

SoundExchange deals with digital performance royalties for ARTISTS and RECORD COMPANIES only.  That being said ... if your are an ARTIST and a SONGWRITER you should be a member of both a PRO and SoundExchange - two separate income streams that you have a right to receive.

If you are an artist but don't write ... you should join SoundExchange if you want to get paid.

If you are an artist AND a record company (even if you just distribute your own recordings) you should join SoundExchange as both and artist and a record company so you receive 100% of the moneys payable for digital performances ... less 5% that will be paid to backgrounds singers and musicians.

Back to the SONGWRITER side ... If you are your own music publisher, you should become a member of The Harry Fox Agency (HFA) (only publishers can join) so you can receive payment for on demand digital uses that REPLACE record sales - for example, plays on Spotify - and, from digital download services from which you don't collect directly.

Now, you do have a right to try to handle all of the above yourself, but, the organizations mentioned above are substantially not for profits set up to act as partisan collectives and legal and legislative representatives for those who create and/or own the rights to music.

Because of their size they have the wherewithal to continually evolve technically to meet the challenges of the ever changing music marketplace - something creators on their own couldn't do even if they stopped creating entirely and devoted full time to the business side of the music business.

Unlike other organizations that have popped up claiming to offer similar services, the organizations, above, do not act in their own self interest ... but, rather act solely on behalf of YOUR self interest.

DMN,

If you are going to post these numbers you also need to explain how publishing splits work. You need to state what the writers' % of the song is as well as mention the publishers share of the money.

Living on a Prayer has three writers: Bon Jovi, Desmond Child, Richie Sambora.

Lets say they are an equal split (which they never are). 33.33%, 33.33%, and 33.34% 

But that split is only of the writers half of the song.  The other half of the money goes to the publisher.

So if Desmond Child is getting $100 for 6 million plays, then Pandora is really paying ASCAP, BMI, and Seasac $600 in publishing royalties for 6 million plays.

Please note that that $600 is just for the lyrics and melody. It does not include the money that needs to be paid to the label and producer for the actual sound recording.

If you can get us the earnings of Living on Prayer for Mercury Records and for Bruce Fairbairn we'll have a much better picture of what Pandora actaully pays for a single song.

Good points and you're right.  All of the writers and publishers money needs to be considered.  Then you have the complete picture. Living on a Prayer turns into $662.52.  Three writers and three publishers.

Ok, 

So what about the domino effect though? What about all the "kids"/people that are turned on to that music by hearing it? The fact that those services exist in the first place, pushes the legacy of that song further into the culture. Those services generally have overhead and a million other artists to pay for as well, so its not like they are getting free money. Those are valid resources for discovery. Be careful with targeting these services as the bad guy. It can be a little like shooting yourself in the face. If everybody jumps on Spotify and Pandora, and starts to demand more payment, those services become prone to becoming less popular/bankrupt/out of business...then where are we? Obviously bands/artists deemed "too big to fail" are going to find a way to get paid anyway, but smaller acts need a solid avanue for fans to find them.  

"What about all the "kids"/people that are turned on to that music by hearing it?"

Huh?  This is isn't even close to reality with 77,000 (according to RIAA) or 350,000 (according to CD Baby) being released annually.  

Pandora doesn't scratch the surface of music being released and in particular because they have teh requirement to have to be able to link to Amazon.com for click-through sales of an album they choose to program.

If you're an indie artist, you're lucky if know about Tunecore or CD baby.  Most don't know enough to set up there own stores on Amazon so Pandora can leach percentages from click-through sales of their title.

Paul, what are you doing?  Why are you giving such incomplete information?  Is this really all you're getting?

You're still not indicating who these Pandora related payments are going through.  Is it their PRO?  SoundExchange?  Their label?  You are fully aware that Pandora is not paying the artist directly. 

You're ginning this up now Paul, just to feed the controversey and then feed off it.  Sloppy.  Just sloppy, lazy reporting.  

Get it together man.  You have some responsibility here to do more than report 2 statistics without any background info. 

This is what happens when a business model is based on a new copyright (DPRA) granted by congress. For good or bad, it takes time to work out the grim details.

Digital sound recording streamers have to pay twice; a sound recording license and a song license. Naturally they will try to squeeze the weakest one.

The sound recording companies have the political clout, so guess who gets squeezed.

Nothing personal, it's just  business.

This situation needs a solution.

Bloody hell.

Damn, can songwriters get a break?

IMRadio is re-creating a new Music Culture, focused on a profitable business model for both the new Music Industry AND Independent Musicians/Labels.  IMRadio never pays royalties on the music it broadcasts, enabling IMRadio to offer a predicable balanced revenue-share model for artist compensation. 

The revenue-share model is designed to provide a larger percentage of the revenue stream to its independent musicians, its partners, and IMRadio.

God! The music sucks...

Is this TMZ or DMN. Report some real news and actually write something that addresses the issues at hand. 

this is why people are starting to flock to Funn Networks as they prepare its beta... Funn is paying indies and top artists twenty times more than pandora, spotify and even paying ten to twenty times more on music videos.... They have a facebook and twitter account, look them up

Just because a network is fair and independent now does not mean they will stay that way. I've been on one in particular that started out as a 'friend of the creator' then got sucked up by one of the biggest players out there, and is now starting the ripoff machine again, including the material people already uploaded.

The whole industry needs to be rewritten from the ground up NOW.

Pandora's genome is a recommendation engine - a music discovery service.
Consumer says: "I like X."
Pandora genome says: "Okay here's a bunch of other music that matches criteria for X." 
Pandora gets a bit of a sale if they refer that sale to a retailer. A tiny bit. And to get a listener from "I like what I hear when I'm cooking" to getting a click-thru sale, is harder than Pandora thought.

To construct their Genome, they put together a mechanical turk operation (real humans) to classify music (their Music Genome). They tried to get the best people to input the tags, keywords etc., but the genome is still flawed -- some of it programmed by barely competent interns and free-workers. So the recommendations often suck, are jarring, irrelevant, stupid.

Pandora was doomed to have no revenue model when it launched without being tied to a wholly owned retail and downloard operation, It lacked a solid interface design that got vistiors from "I like"  to download. Pandora was not a selling environment and more than radio is. it's an awareness building environment. Pandora has a great music discovery (shuffle, low user-control) service, but it has no revenue model that can pay the creatives whose work it depends upon.

Plus the genome wasn't constructed for ad targeting. I huge mistake. So you get served ads that nothing to with what you're listening to. People who like Neil Young buy...what?

Pandora is now asking Congress to change the law just to make its flawed business model work. This is MASSIVE overreaching. In fact it's corporate welfare. They've drunk the kool-aid.

A majority of people posting here don't show much knowledge about the intent and purpose of copyright law for creatives. "Go make live music if you want to make money" can only be said by an ignoramus in his early 20's or late teens who has downloaded thousands of tunes from Bit Torrent and thinks everything created by other humans should be free if HE can get away with it. Walk a mile in a working musician or writer's shoes, you freloading dunce.

The above post exposes one flaw of Pandoras' business plan.

I would guess that the failure of the sales referrals is due to a few different things:

1. Pandora is free and attracks folks who aren't interested in making a purchase in the first place.

2. Why buy what you like when you can listen on YouTube, download at a pirate/ sharing site?

3. ADHD prevents the follow through necessary to complete an online transaction? ( this is a guess since I have never tried to click through to a sale from Pandora.)

I do have a suggestion for Pandora to help save costs, which is to have a better way of stopping streaming when nobody is actually listening. They pay for songs being streamed, not necessarily heard. Which is a waste of their apparently limited resources.

I bet they could cut their licensing costs dramatically if they worked on waste reduction instead of litigating, treating content creators like perpetrators, and literally trying to create an act of Congress to save their sinking ship.

I, for one, love access to music. I had to utilize my local library when I was a kid if I wanted to hear a song, on demand, without making a purchase at my local record store. I think access to music is a great thing, and I think Pandora had good intentions. But the way things are going, I can't say I support Pandora, any more than I support those guys who sell bootleg CDs laid out on blankets in all the major urban centers in the world.

And one more thought - the upside to all this, for songwriters and artists who work with labels and PROs, is that the shenanigans that have prevailed with regard to accounting and royalties and ultimately theft of revenue due, might get exposed, finally, and perhaps a fair and balanced division of profits will be a happy accident, more than a silver lining.

Progress can be slow. We can hope for a better future for creators, and hope younger generations of talent are willing to put time and energy, their blood, sweat and tears into making music for the masses. It starts here and now.

okay, so somebody listened .. that doesn't mean they downloaded it .. go to amazon .. type in addambongg .. see how it's supposed to work .. or go to ourstage and type in addambongg .. see how it doesn't work .. then tell me why, if you can figure it out .. love, peace, occupy