This is a letter from an indie label owner boxed out and frustrated by Pandora. It details some of the costs for promotion on the Pandora platform, which can include audio, visual, banner, or other slots. The smallest, shortest campaign starts at $1,000, which gets seriously expensive when a serious campaign is involved.
A representative for Pandora declined to confirm or deny the charges over email.
(bold from the original letter preserved)
Nobody’s talking about the unintended consequences of the high royalty rates that these services are currently paying the major labels.
For example – when Pandora first started, they were easy to work with and you could engage with them to promote your artists. This was a boon to indie labels. Now that the majors are forcing Pandora to pay such high rates – Pandora in turn is trying to make up for it by charging artists money to be promoted through their service.
The minimum amount is $1,000.00, which is out of the range of most indie artists in a business that it is increasingly hard to make money at.
It’s a combination of audio, tile, and banner ads, positioning, etc. It doesn’t get you much. The way they spin it is you can target by Zip Codes, Cities/Regions, Gender, Music Preference, etc., to really dig deep and get to the fans that actually might buy your music.
It’s actually kinda cool – but the problem is that more and more, people are dipping into the artist’s (and my) pocket for visibility. Everyone has got their hand out to get a decent review in the larger indie publications (print and online), and it really sucks.
The Indies have been much quicker to adopt new technologies – but this is an example of how that’s being impeded. I fear that what’s happening with Pandora will start happening at the other online streaming services – which will just shift the old monetary impediments for Indies to break through from one paradigm to the next.
The streaming services are under tremendous pressure from their investors to show growth and stable revenue streams – so they are ultimately going to pass those high royalty costs along to either the artists/labels, or the consumer of the service – or both.
Until and unless everyone comes to the reality that EVERYONE has to be willing to take less and adjust their models accordingly in order for us to ALL grow in these new models – we will continue to muddle along at a snail’s pace in this Brave New World of the recorded music business.
The majors are short-sighted. Greed and desperation are having (perhaps) unintended consequences that effect everyone, especially the indies.
As you can tell – I’m passionate about this – I don’t wind you up on many things. But I see this trend developing and it’s NOT GOOD.
It’s just taking the same old “he who has the most cash wins” paradigm and shifting it onto the new models. We are never really going to move forward and have a healthy and growing business for recorded music again until everyone takes a hit and agrees to take less in the short term for more in a few years once the new models take hold.