Tim Westergren, 2009: “Pandora’s Royalty Crisis Is Over!”

This sort of begs the question: if Pandora gets the royalty reductions they want in 2013, won’t they just be lobbying again in 2015?  Or, as evidenced by this bit of history, immediately start planning the next phase of reductions?

Here’s an emphatic blog post Pandora founder Tim Westergren wrote way back in 2009, the last time internet royalties were ‘resolved’…

timwestergren_2009
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8 Responses

  1. Ghost of Rick Ross

    Back in ’09, Tim Westergren was saying the entire thing was gonna be shut down just like that. In that case the industry almost killed it, and they don’t want that.

  2. Dry Roasted

    Everyone needs to sleep at night, but Westergren’s act a sham — he’s as cold and calculating as the CEOs of Exxon Mobil. I wouldn’t say he hates artists, just that he loves money a LOT more. So don’t buy the “charisma” of it (which isnt working anyway).

  3. Yaaaaaaawn...

    Paul, this dead horse has been beaten to a pulp. We get it, there are greedy people in this business. Please find something, anything else to write about.

    • Still Trottin'

      What other stupid things as Tim said in the past? Maybe a few more races left for this horsey.

    • Adam

      I couldn’t disagree any more…
      Sadly this horse is not dead, it is still flailing its limbs, and I hope Paul beats it over and over and over until it finally does die.
      Westergen is a sham, and we need people like Paul to keep the public eye on him. This letter is a prime example. We all know if you give an inch, they take a mile.
      Yes, there are other greedy forces in the business. But don’t be fooled. This is one of the more important fights to be fought. If Pandora can’t man up and start charging a few dollars per month AT MOST to help both the artists AND his company, he deserves to go under.
      Yes music has become more free these days. But that is not an excuse for exacerbating the situation or straight up trying to convince musicians into bilking themselves and lowering their own paychecks.
      Anyone who can’t see this is a fool. Anyone who believes otherwise should keep their opinion to themselves, because they aren’t helping.
      I am 100% against whiny musicians who say they don’t make it big. But that’s another issue related to false expectations. When it comes to royalty rates and the future of the entire structure of the industry, its not possible to beat a dead horse enough. Someone has to force people to act and react since business isn’t doing that by itself. Duh.

      • jw

        The Pandora issue is entirely a fase expectations scenario.
        Consider this. A Pandora station is generated on demand, & is tied to a single account. A user can skip songs without affecting anyone else listening to the “same” channel. Therefore a single play on Pandora is, for argument’s sake, linked to a single pair of ears, but shows up as a single play on a royalty statement. Conversely, an AM/FM radio play goes out to thousands (tens if not hundreds of thousands), and yet shows up as a single play on a royalty statement. Based on David Lowery’s published BMI royalty statement, a Pandora play pays out about 1/5000th of what an AM/FM play pays out, at least to songwriters. So if you have 5,000 Pandora users queuing up the same Pandora station & hearing the same song, or whether you just have 5,000 people tuning into a single radio play, the payout is equal. The only problem here is that a lot more than 5,000 people are tuned into the average radio play. When compared at scale, it becomes obvious that Pandora is paying many times more than other services.
        The crux of the matter is that revenue is generated when a user hears a song & then sticks around for an advertisement, not when a song is simply played, & so revenue, & therefore payouts, is inextricably linked to “listens” rather than “plays.” Artists are, en masse, therefore, expecting to get paid disproportionately to the revenue they are generating for Pandora. The expectations are false.
        Additionally, the variety of artists getting played on Pandora is mind boggling. When there’s concentration, you send one artist a check for $1,500 & they’re your best friend. But you send 100 artists checks for $30 & all of the sudden you have 100 enemies & everyone feels jipped, even though you’re paying out double, just because you’re spreading the wealth out. In the end, it’s the fans who are deciding how these payouts are distributed by the stations that they choose to play & the songs that they upvote or downvote. And artists, apparently, aren’t down with that.
        There’s a lot of artists, & a lot of middlemen, who maintain that Pandora payments aren’t “fair,” but their emotions shouldn’t factor into the equation. This is about math & about reason, & when you take a sober look at what’s actually going on, it becomes clear that Pandora is actually one of the most artist friendly services out there.
        For the record, I don’t care for the service itself, I don’t use it. I’m just sick of everyone attacking tech companies because they feel like they deserve more. It doesn’t add up. Look at a la carte pricing if you really want to raise a stink.