BigChampagne's Ultimate Chart (a/o February 3rd):
1. “What Doesn't Kill You (Stronger),” Kelly Clarkson
2. “Turn Me On,” David Guetta
3. “Set Fire to the Rain,” Adele
4. “Rack City,” TYGA
5. “Good Feeling,” Flo Rida
6. “Young, Wild & Free,” Snoop Dogg & Wiz Khalifa
7. “We Found Love,” Rihanna
8. “Sexy and I Know It,” LMFAO
9. “Domino ,” Jessie J
10. “International Love ,” Pitbull
Pandora pays a monstrous percentage of their revenues to SoundExchange for the use of recordings. That is, 60 percent according to the latest estimates from Pandora founder Tim Westergren. But this could have been a whole lot worse, and A2IM chief Rich Bengloff takes some of the credit for softening Congressionally-mandated rates to more reasonable levels. "We want parity with the majors - why should we get less?" Bengloff posed to Digital Music News on Thursday. "But we led the discussion to get the rates for the industry as a whole to be lower so Pandora could sustain their business."
Bengloff is a nice enough guy, but this was hardly an altruistic crusade. The independent sector has typically been locked out by major radio stations - and their simulcasting mirrors - but Pandora's sudden rise to fame is helping to change all that. "Selfishly, they play a higher percentage of independent music," Bengloff noted in an earlier interview.
Actually, listeners are the ones playing the independent content, thanks to their thumbs-up or thumbs-down refinements. Either way, Bengloff praised Pandora to being completely willing to pay royalties. "People have come to us asking for promotional only deals, it's really BS," Bengloff relayed. "Pandora is not looking for this type of model."
But, 60 percent? Sounds like Bengloff helped to bend Pandora over a little less, instead of save their business. On that note, Bengloff readily admitted that Pandora pays "a very generous amount," though he also noted that over time, Pandora rates - as a percentage of overall revenue - will start to normalize somewhat. Or, that is the hope, anyway.
Comments Closed
CTyankee Monday, August 02, 2010
No doubt I see Bengloff trying to create something more sane, but who is really kidding who here. Pandora has not not "made it" really, they are still struggling to make it profitable ongoing, and so much revenue is just going out the door. And any startup knows you need money back in the door to reinvest. not out the door to go down some drain.
Then, remember that this is what is termed variable rate structure, so the more people the more songs, the more payments.
Then I think Bengloff could've tried a little harder, because the money than just sits in Sound Exchange not getting paid out. So, we could easily see a Pandora out of business, with all of the money sitting in some account. Sad.
brent Monday, August 02, 2010
Pulling 60% of gross revenue off of the top line does not appear to soften the "Blow" to me. It's pretty punitive. Look, Pandora needs to pay royalties. They're building a business on the back of creative musicians and leveraging their work for profit. It's a simple fact.
My only issue is with the portion of that money that actually gets back to the artists. I'm hoping that Sound Exchange hasn't ramped up the cost of business like the RIAA has. However, knowing that every buraracy tends to be bloated, I don't believe that the 60% of revenue Pandora is paying benefits the artists as much as it should. Perhaps it's nearly impossible, but a direct license with the rights holders could save Pandor a mint AND put more money into the artists hands. I guess I just don't trust these organizations to cap their expenses and thus increase the benefit of the artists they're charged with protecting.
Brent McCrossen
CEO - Audiosocket
http://audioscoket.com
an indie Tuesday, August 03, 2010
A direct license with rights holders is probably the WORST way to "get money into the hands of artists". Almost every artist contract with labels refers to "direct license" income as master royalties that are split 50-50 between the label and the artist AFTER the artist has recouped advances and chargeable expenses. On the other hand, the statutory royalty paid by Pandora (Sirius, Music Choice, etc.) is collected by SoundExchange and then paid out directly to registered artists and labels (including backing musicians). No recoupment. No funny business accounting. Artists see this money as soon as they've accumulated more than $10 of royalties in SoundExchange's books.
SoundExchange is financed by an administrative fee and their budget and management is overseen by a board of directors that is 50% made up of artist representatives and 50% label representatives.
There are data and registration issues causing money NOT to be paid out but the broadcasters share in the responsibility for a lot of this. They submit playlist info that assigns incorrect info on the music they play and create a challenge for SoundExchange to clean the data. A tool has been created to help artists and labels assist in the process of cleaning their own data (while also making the process have more transparency). The tool is called PLAYS and it is on the SoundExchange website (http://soundexchange.com/performer-owner/does-sx-have-money-for-you/plays/). It is a search engine that any artist or label can use to see how his/her info is being submitted to SoundExchange from broadcasters and offers a function that allows anyone registered to correct errors.
I should note: I do NOT work for SoundExchange. I've just spent a lot of time helping people untangle some of the (relatively) small hurdles that are tying up money at SoundExchange.
NathanJE Tuesday, August 03, 2010
@an indie
could you share with everyone what the top issues artists, labels, whoever face trying to get their money released? this would be really helpful because a lot don't know where to start.
an indie Tuesday, August 03, 2010
the place to start is registering (either as a performing artist or label/copyright owner). in some cases the artist ALSO owns his/her copyrights. in these cases BE SURE TO REGISTER AS BOTH so that you collect both halves of the royalty that SoundExchange pays out (it is split 50/50 between the copyright owner share and the performing artists' share - with approx 5% of the total going to backing and side musicians through their unions). to register go to www.soundexchange.com. you should be able to register online but i've heard repeatedly that the online process has glitches and can be frustrating. avoid that and just print the documents and fill them out. it is NOT difficult and doesn't require legal representation...just basic info about who you are and where you can be located.
SoundExchange accounts quarterly and to insure timely & correct distributions they typically require that you're registered completely approx 1 month before they get set to release a quarterly accounting. so that means you're right up against deadline if you want to get in for their Q3 September distribution. Get on it!
Once registered there are the aforementioned data issues and the PLAYS tool on their website which can help you fix errors that you find on your tracks. The errors can range from mis-spellings to space/grammatical entry errors (is your name hyphenated? are you named Suzie but sometimes people refer to you as Susie?...that kind of stuff) so you need to use PLAYS wisely to find these types of errors that might be costing you money (i.e. if you are Brian Setzer and a broadcaster reports your info to SoundExchange as Brian Stezer, for instance, there is a chance that money isn't getting to Mr. Setzer). If you're a label or copyright owner and you've sent out white labels to radio or MP3s are circulating without perfect metadata it is not uncommon for broadcasters to play your music but report it to SoundExchange as being from a label named "n/a" or "no label info provided" and in those cases the copyright owner would miss that money. Again, this can be fixed in PLAYS.
Next: make sure after you submit your PLAYS corrections that you re-check PLAYS. Check it again in a month or two to (a) confirm that fixes were made and (b) to make sure that new errors haven't cropped up. If you do this every quarter things should stay pretty clean. If you find that they are NOT getting fixed or that they repeatedly slip back to being incorrect you THEN should contact someone at SoundExchange and professionally complain. Document things - as you would with any service you're working with - so you have notes to refer to.
Last (or first) step: make sure that forever more when you circulate music that you CLEARLY label your name, the track name, and the name of the sound recording copyright owner to help broadcasters avoid errors in the future.
Sorry for the long post...
NathanJE Tuesday, August 03, 2010
@an indie
wondering who you are? think you've got a lot to share here... might be worth putting a guest post together for Digital Music News or something.
an indie Wednesday, August 04, 2010
aw shucks, nathan. thanks, but Paul provides a forum here on his site that is sufficient for me. anonymity helps me because sometimes what i have to share would be compromised if my identity was known (i work with a lot of people who i need but who i don't necessarily think do the right thing all of the time). but i do promise not to use my anonymity to bash or malign - that frustrates me about blogs and online anonymous posters. good luck getting registered @SoundExchange. i know it can be frustrating to run into hurdles but it really is a fantastic royalty model for artists and indie labels.
brent Monday, August 02, 2010
Pulling 60% of gross revenue off of the top line does not appear to soften the "Blow" to me. It's pretty punitive. Look, Pandora needs to pay royalties. They're building a business on the back of creative musicians and leveraging their work for profit. It's a simple fact.
My only issue is with the portion of that money that actually gets back to the artists. I'm hoping that Sound Exchange hasn't ramped up the cost of business like the RIAA has. However, knowing that every buraracy tends to be bloated, I don't believe that the 60% of revenue Pandora is paying benefits the artists as much as it should. Perhaps it's nearly impossible, but a direct license with the rights holders could save Pandor a mint AND put more money into the artists hands. I guess I just don't trust these organizations to cap their expenses and thus increase the benefit of the artists they're charged with protecting.
Brent McCrossen
CEO - Audiosocket
http://audiosocket.com
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