So much for those air-tight negotiations, but... it looks like Apple is demanding a radio royalty rate that is half the statutory current rate paid by Pandora (ie, about $0.0012 per track, with Apple's request coming in at a paltry $.0006). A major label executive phoned an old industry standby, the New York Post, and shared the news (which of course, Apple loves).
So is this just a case of the rich guy being cheap? Apple might argue that its integrated radio service deserves a lower, directly-negotiated rate, thanks to an iTunes-nested platform that enables instant buying (and they may be right). Then again, acquiescing to that demand could make it harder for the major labels to argue against Pandora's aggressive demands in Congress for lowered royalty rates.
And let's not forget, Apple is apparently poking into the on-demand subscription space as well, with some 'informational' meetings with Beats/Daisy.
And speaking of Pandora, this streaming financial mess actually got quite the bounce on Wall Street on Thursday. Aftermarket shares were surging, largely because recent quarterly revenues jumped 54.1 percent to $125.1 million, with bumped-up ad revenues (including mobile revenues) a major reason. Perhaps expectedly, profits — or lack thereof — were the problem, with losses stumbling to a massive $14.6 million (in one quarter). But even that was considered an improvement.
Which brings us to Pandora CEO Joe Kennedy, who's now stepping down after ten years at the helm. Kennedy, considered an adult at the table, may have gotten the boot for a trainwreck of financial losses and fruitless Congressional and PR campaigns. Or, maybe the guy's just fried. Interestingly, Kennedy was one of the few executives not cashing out tens of millions in Pandora stock — but that could change upon exit.
And, Facebook. Which has now unveiled a completely-revamped newsfeed that contains a music tab. Which means a separate section for music-related updates, a longtime sore spot for Facebook bands. According to Zuckerberg, this is 'the best personalized newspaper,' complete with all sorts of content-specific sections, though let's see if it really bumps band views and engagement.
More on Facebook's News Feed update here; ongoing coverage from various partners (including DIY players) ahead.
And why are major labels supporting streaming and access over ownership, despite the massive drop in potential revenue? Here's one take from Moses Avalon.
Just in time for SXSW: On the funding front, discovery-focused app TastermakerX has just rustled $1.25 million, with a shift away from the whole 'stock market' gamification concept.
Are they running that circus animal into the ground? Enter Justin Bieber, who is scheduled to play a Friday gig at the O2 in London after collapsing on stage last night. Medics attended to the 19-year-old, who was later hospitalized (and tweeted a topless pic from a hospital bed).
Applala Thursday, March 07, 2013
Lala was a web-based cloud storage and streaming service (which the labels liked or at least tolerated) years ago that had an iphone app ready to go - and Apple wouldn't approve it because they knew it was a game changer. Apple instead bought Lala - and shut it down. Buying them out made perfect sense - but shutting the service down turns out to have been a huge business blunder.
Now after Apple has lost their competitive edge, they are spending more money to re-create something they already bought, and aren't even going to get favorable terms like they would have years ago. The only way Apple is going to get a lower streaming rate is if they take a lower cut from downloads. It won't happen until Amazon does the same and shoves it in Apple's eye.
Apple's greed is ingrained and always comes back to bite them in the ass.
David H. Thursday, March 07, 2013
Just for the record and fact of the matter--presently Pandora is not paying the full statutory rate. They pay approxiamately one half of $.0021 per song per listener.
This was immediately negotiated with the labels after the CRB rates became law 2008/2009.
Fact is, no webcaster large or small has ever paid the statutory rate--mainly because they're absurdly high and unworkable.
So, Apple is just asking for what's currently on the table. God speed Mr. Cook.
Visitor Thursday, March 07, 2013
They are asking for half of the pureplay rate. Not half of the full statutory rate.
And yes, many webcasters have paid the full rate including Pandora for Pandora One subscribers. Clear Channel and SiriusXM both pay the full rate because neither meet the definition of a pureplay. Any service that has a subscription tier has to pay the higher rate and all terrestrial radio webcasts are supposed to be at the higher rate because they are not pureplays.
David H. Thursday, March 07, 2013
Right you are on half of the [u]Pureplay[/u] rate. I was refering (not clearly I guess) to the CRB rates as "the statutory" rates.
And silly me did not go to the NY Post article to see that Apple was offering .006 before I posted. So I stand corrected in my statement that Apple is just asking for the same rate as Pandora.
I maintain however that Pandora (under Pureplay rates) is paying approx. half of the default CRB webcasting rates.
Thanks to the WSA in 2009 no webcaster has had to pay the full statutory rates set by the CRB.
As for Sirius/XM---they pay under a much more reasonable scheme. They do not pay on a per song, per listener basis like webcasters. Their royalties are based upon a percentage of gross revenue. 9% with a cap of 11% in 2017.
Paul Resnikoff Friday, March 08, 2013
(David, also, if you want to do HTML in the comment, easiest way is to just use the editor buttons below (with bold, italics, etc. options).
TUNE HUNTER Friday, March 08, 2013
Apple has alway been cheap and in reality Apple should be blamed for demolition of music industry. As far as radio goes - it should be the artis or label who pays radio station for each public play so the folks can Shazam-it Soundhoud-it or Gracnote-it for 29 cents a tune. NOT a free ID per Apples set up but one way instant sale. "You like it - you got it" no reverse! All three of those entities should be sued by RIAA for percolating with all music database and providing in 19 out 20 cases free service to pirates and one sale to Apple.
This is the bigest case of industrial prostitution I know!
TUNE HUNTER Friday, March 08, 2013
.... and they have over half a billion users ....and all milk investors or parent company! Labels never noticed them and Apple has put them on the street.
Facebook with 800 million users and less obvious goodwill and product sales abillity has vacuumed over 100 billions from the market. Shazam is in the red for last 12 years!
All three, plus all the lyrics services should convert to instant music discounters at once. Music will start to sale and pirates will will be choked automaticaly!