The Difference Between a Pandora Executive and a Pandora Artist…

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Here’s what Pandora paid the following people for the year 2013 (source: Morningstar, SEC filings):

I. The Executives.

  • Brian McAndrews, CEO: $29,167,388
  • Joseph Kennedy, former CEO: $9,336,760
  • Michael S. Herring, CFO: $8,445,668
  • Thomas Conrad, CTO: $4,945,757
  • John Trimble, Chief Revenue Officer: $3,568,485
  • Tim Westergren, founder: $11,685,277

II. The Artists.

  • Bette Midler: $456.44
  • David Lowery (Cracker): $67.56
  • Ellen Shipley, hit songwriter: $158.41
  • Aretha Franklin: $0
  • Elvis Presley estate: $0
  • The Temptations: $0

(top three self-reported, bottom three based on Pandora payout policies for older artists)


32 Responses

    • TuneHunter

      Not necessary, if we switch to Discovery Moment Monetization there will be 5 billion dollar Pandora and there will be over $100B global music industry.

      Pandora is a good farm animal lets’s harness it to proper cart!

      • TuneHUnter

        Don’t be so negative.
        User likes the tune? Wow Shazam delivers and keeps on the cell phone for next 7 days sample of that tune !
        User can have few passes at that sample, better yet Shazam can’t alternate different 30s at each attempt to buy or or not to buy (add to the playlist or not to add to the playlist).

        NO HARM TO ANYONE! If you want to enjoy it again, on demand, WHEREVER or WHENEVER just pay 39¢

        Sorry, but in the era of internet if you know the name of the tune YOU ARE THE OWNER.

        Today the best music industry can do is divert you to Veevoo or YouTube master pirate boat. There for every 100 to 200 prostituted tunes they get advertising jackpot and receive few breadcrumbs from Google The PirateOne.

        I do not want to be arrogant but DISCOVERY MOMENT MONETIZATION is the only way to go.

        As a warning:
        a/EU and US is right now in process of major copy right and fair use changes – next window of opportunity might never come again – the music will be dead.
        b/ Veevooo is for sale – if that happens music as a merchandise will be finished. New owner will have permanent rights to continue this suicidal activity. Big floodgate will stay open and music will continue to monetize at less than 5 cents on the dollar.
        c/ as the time goes we do not know what other Trojan Horses Mr. Francis Killing will incorporate to licensing
        deals with our current avant-garde players like Spoofy, Deeezer etc.

        To finish: ads and subs in most optimistic outcome can deliver at the best 35 billion global industry by 2025
        Discovery Moment Monetization would deliver 100 billion before 2020 and all current a players would thrive!

        • TuneHunter

          Another note to Mr. Otherwiseness,
          Your point of view is music consumer point of view, since most of current music consumers are freeloaders your opinions are biased and irrelevant.

          Music is outstanding, requiers a lot of creativity before it becomes a balm to your soul.
          Good music is premium a product and should be sold like premium cosmetics or jewelry so get lost if you have problem with 39 cents!

          • Otherwiseness

            Quite the opposite really, my viewpoint is that of a capitalist, probably also helps that I have spent most of my life on the professional side of the music industry.

            Lets go through your statements, I’ll ignore a large pile of completely irrelevant statements.

            > Don’t be so negative.
            “Discovery moment monetization is the opposite of progress” is as close to a positive statement about it as can be made.

            > User likes the tune
            Nope, you are already assuming that the discovery process has happened, this directly and immediately violates every principle you set forth. Game over.

            > NO HARM TO ANYONE!
            Quite the opposite. Music always has and always will be an immediate purchase. Your current modification of your original thesis actually makes it worse, not better. By providing the listener the content for free for a period of time the sales window closes.

            > I do not want to be arrogant
            Too late. You not only revealed that you are arrogant, but blind to reality and have no grasp of the industry.

            I still think the PMI concept is the way to go, but again I have no idea how to get people to sign up.

          • TuneHunter

            Your PMI sounds like some kind of religious fund raising. With enough fanatics maybe?
            All ASCAP/BMI/SESAC and many more payment platforms in individual countries all over Europe governed by 70 some year old government rules should be scraped at once! i.e. monthly payment for Jukebox!

            Technology allows to track route of each tune to customer and pay out to composer, vocalist, Radio, label (if there is one) or Shazam based on actual event. EVENT would be the moment when person decides to enjoy specific music again at their wish. The 39 cent event making 100 billion dollar industry.

            There is no other way. In digital era knowing the name of the tune YOU ARE THE OWNER.
            Unless we put to work all ID services. As we are Shazam, Soundhound, Gracenote, TheEchoNest, Google Music Search Google Lyrics ID and few more music search engines have well over billion users and provide noting to themselves or music industry. Twitter IPO = $30B for just 200M users, Facebook IPO = over $100B with just 800M users at the time of IPO. Both of those entities can peddle nothing but ads ads.

            Our music ID friends have well over billion users and are able to sale actual goods! Not counting Google their capitalization is at less than ONE BILLION.( Sony bought Gracenote for $250M just sold for $170M, TheEchoNest just taken over by Spotify for just $100) All of them are just industrial nerds living out of investors money not able to monetize their superb technology.

            In reality they are the reason why music is wallowing in the streets ready for grabs at any time by anyone. Let’s give the some purpose, they do not need to be PIMPS of music.

        • mdti

          I also beleive that it will be like in step 1.
          “nurture piracy” would be a better label than “discorvery moment monetization”.
          I know a few websites that tried to work that way (pay the fee and enter the websites with critics, reviews etc etc). Failed.

          • Tune Hunter

            If you convert all music ID services to profitable cash registers of the industry FREELOADER will be screwed! First he will eat away his finger nails and finally will start to click 39c tunes.

            It is not easy to built and maintain current data base of 25 million tunes and have reliable ID software and keep servers running 365/24.

            You have to have a lot of cash and nerve to use it for trespassing and sorting thru someones property and giving it to any scumbag for free at a click of the button! IT IS CRIMINAL ACTIVITY BY ANY SOCIAL STANDARD IN LAST 2000 YEARS. …and they are so nice, so fashionable – sorry they are LOST!

      • hippydog

        Quote ” Not being familiar with “discovery moment monetization” I did a quick Google.”
        and Welcome to the Tunehunter world 😉

        Many of us have tried to make sense of what he is actually proposing, but as you will quickly notice, any attempt at logic or facts quickly fall into an abyss of misdirection and bad translations..

        great.. now I am starting to sound like him..

        • TuneHUnter

          You don’t need to go to Google, if you read just conversation above you should be able to understand DMM.
          If you are on Spotify side of music distraction tell them it would help them not only survive but thrive.

  1. Anonymous

    “Bette Midler: $456.44
    David Lowery (Cracker): $67.56
    Ellen Shipley, hit songwriter: $158.41
    Aretha Franklin: $0
    Elvis Presley estate: $0
    The Temptations: $0”

    Why are these ‘artists’ supposed to be “rolling in the dough”? These crybabies just don’t make music at a level that is palatable to the masses.

    For once, I’d like stats from an actual well known musician.

    • anonymous

      I do think it would be good to see how much relevant artists make from streaming services like this before pointing fingers. However, the issue is that music is what makes this company money and artists should be compensated fairly for they are providing the product that this and other streaming services use. One could argue that advertising is what makes the money, but there would be no point of the ads if it weren’t for the music. Point blank – music is the backbone of streaming companies and artists should be fairly compensated.

    • Anonymous

      Cracker is a one hit wonder with a 20+ year old hit. The single “Low” is the bulk of the money he made.

  2. Anon2

    Do a deeper dive and you realize that the vast majority of the the payouts are in company stock. Considering Pandora’s inability to generate a profit, there’s not guarantee these guys will get anywhere near the amount mentioned above.

    • Paul Resnikoff

      I’d encourage you to look at the cashouts, which are by law specific in SEC Form 4 filings.

  3. jw

    Jesus, Paul.

    I don’t think that the $0 figure for Aretha is accurate. First of all, the labels just brought the lawsuit, which makes me think Q4 2013 was the first quarter they denied payments. For it to have been $0, it seems like they would’ve had to have stopped paying at Q4 2012, & there’s no way the labels waited 12 months to file a suit. Second, Pandora is still paying publishing royalties on these songs, & she wrote or co-wrote some of her biggest hits, including Think.

    Also, like it’s been mentioned, Brian McAndrews drew $500,000 salary last year for 3 months of work. Otherwise he was otherwise paid 2m shares of stock, which is equity, which is speculative wealth. Conceivably, Pandora stock could drop to $0 & it turns out he only made salary of $500,000. Otherwise, if he tried to sell off 2m shares, there’s no way he would get the current stock price for all of it, as the sale would cause the stock to nosedive. Any way you look at it, it’s disingenuous to list this as a dollar amount.

    But what really bothers me is that you’re insinuating that artists have some claim to P equity, which is insane. David Lowery doesn’t have any more claim to that money than Tide has to shares of Wal-Mart. Only Tide knows it because those guys went to business school & have at least a basic understanding of how businesses work. When you make these direct comparisons between equity & payouts, you’re only making yourself look ignorant.

    Furthermore, I’d like to know if $67.56 is Lowery’s full payout from Pandora for all 4 quarters as a songwriter & also as a performer. And while we’re at it, what SHOULD he be making? Does writing a semi-hit song 2 decades ago entitle him to a salary? Here’s a novel idea… if he wants his mortgage paid by Pandora, maybe he should think about writing another semi-hit song. There’s just not enough money being generated to support every artist who’s had a top 67 hit in the past 20 years off of non-interactive streaming. The concept is just plain absurd.

    This whole post is crap, Paul.

    • Anonymous

      “Jesus, Paul”
      “This whole post is crap, Paul”

      You ain’t nothin’ but a hound dog jw, cryin’ all the time.

      • jw

        Every detail in this post is intentionally misleading, skewed to make a specific point. This is either Paul’s fault, or he’s just copying & pasting Lowery & Co’s bogus propaganda.

        I’d expect someone of high moral standards… someone such as yourself, to have a problem with that. Surely if your argument is valid, your point can be proven without this type of deception.

        • FarePlay

          David Lowery literally opened the door for other musicians to speak out and put the discussion of artists’ rights back in the public arena with his post “Letter to Emily White” as well as writing the definitive piece on the “advances” in the music business with “Old Boss, New Boss” .

          The propaganda you refer to stems mainly from tech industry supported publications like Tech Dirt and articles like “The Sky is Rising”. If you haven’t noticed, Google is already building another “Free Speech” e-mail campaign to oppose “take down > stay down” and any semblance of meaningful “Fair Use” regulations that would inhibit the dominance of YouTube.

          • Anonymous

            “Google is already building another “Free Speech” e-mail campaign to oppose “take down > stay down””

            Good luck with that. 🙂 Everybody knows how easy it was for Google to block child porn permanently in 2013 without any collateral damage.

            Now, the time has come to permanently block stolen Intellectual Property in the same way — fast and easy.

          • jw

            For all of Lowery’s moaning about the artist’s rights (which could also be read as his rights), he tends to leave the consumer completely out of the picture. You have to presume that scarcity is the ONLY motivation for participating in the recorded music economy to buy into any of his conclusions, & I don’t think that’s true. There are loads of examples that disprove this (Radiohead’s novel pay-what-you-want experiment, tons of coffee shop pricing model experiments, etc). He might’ve opened the door to the conversation about artists rights, but he framed it improperly out of the gate, & we’re still seeing the repercussions of that. You never see Lowery exploring ways that revenue can be maximized by meeting consumer expectations, you simply see him trying to extract crash from technology companies in ways that often don’t make any business sense. Any real solution to the problems ailing the industry are going to need to take a look at consumer behavior & how value is being created, & how that can be maximized to the benefit of the artist. Lowery simply looks at what his needs are & then he makes demands. You’ve adopted this way of looking at the industry’s problems, I’ve noticed.

            Where he’s most wrong is when it comes to Pandora. He either doesn’t understand how Pandora’s payouts compare to terrestrial radio payouts at scale, or he’s disingenuous in his arguments. I’ve pressed him on the issue & he doesn’t care to get to the bottom of it. He seems more than willing to skew facts to get his anti-technology points across.

            Anyways… it finally struck me that Paul is just multiplying Lowery’s “My Song Got Played On Pandora 1 Million Times and All I Got Was $16.89″ times 4, which means $67.56” is simply an estimation. But if you go back to Lowery’s post, that’s quarterly a payout for 1 song specifically (Low), & it’s merely a payout for songwriter royalties. His performance payouts are much higher. So clearly $67.56 is nothing even close to a self-reported total 12 month payout.

            What makes it more disingenuous is that he lists Lowery’s total calculated specifically from (incomplete) songwriter payout next to some wild guess at Aretha Franklin’s payout based on the fact that Pandora isn’t paying out performance royalties on pre-1972 recordings. And for all we know, Pandora could’ve stopped those payments Q1 ’14. She might’ve gotten full payments for all songs all 4 quarters of 2013. There is nothing I’ve seen that should lead anyone to believe that she didn’t.

            And what about her songs recorded after 1972? She had a long career, & Pandora is paying her for them. Some of her biggest hits were recorded in the mid/late ’70s (for instance, her recording of Curtis Mayfield’s Something He Can Feel).

            Like I said, this posting is a joke. However, I’m now inclined to put the blame on Paul, rather than Lowery & Co.

  4. smg77

    Pandora is paying millions to labels. Why aren’t artists getting their share?

    • GGG

      They must be paying Paul to tell everyone Pandora pays artists directly.

    • Guile

      I’ve had numerous chats/email chains with label (major and indie) Royalty depts.

      How these missives and conversations are put forth can literally be as confusing as in depth legalese to someone who has a decent handle on standard rights, royalties, and of course their own deal terms…let a lone the layman.

      It’s literally akin to getting pulled over by a cop and knowing your rights, or not…they’ll get away with whatever they can to screw you.

      They will shuck and jive, dance around standard vs. neighboring rights, foreign distro, and their favorite, the inability to deliver “granular data” AKA what your actual numbers look like per service and territory. You’ll never see the details of actual direct deals they cut to outlets, and even the PRO’s bury their specifics when it comes to streaming in general (IE their cut).

      The aggregators aren’t much better unfortunately, they can get you on pretty much every outlet but only account for the bigger guys.

      There’s a lot of work to do.

  5. Anonymous

    Forget about the low artist payments, because these are just assumptions or from the very few figures available. My question is how is anyone at this company pulling in almost $30m?!?!?!

    • AitchDee

      The individuals that pull down these salaries are pigs, unable to stop gorging themselves at the trough without a moment’s thought or regard for anyone else.
      Even their ‘co-workers’ at Pandora don’t even begin to get a taste of this type of excess which is reserved for C-level “executives”.
      The same is true throughout the industry. There exists little if any morality or ethics when it comes to this most basic issue of compensation and it’s sickening to behold.

  6. Chris Castle

    Great post, Paul, it’s fun to watch the hairsplitting begin. You should also post the same executive comp info for Sirius for comparison. And the cartoon is nice, but in this case the rolls are reversed. The fat cat has his hand out.

    • jw

      Brian McAndrews was hired at a $500,000 salary + performance bonuses (another potential ~$500,000). When he was hired, the stock jumped $2.50, increasing the market cap by $400 million. If he sticks around for 2 years, he has 2m shares of stock options/restricted grants. That’s ~$28m (if the stock holds… could be more, could be less), which is essentially coming out of that $400 million in value that he, himself, directly created. The value of the stock didn’t spike because of David Lowery, Aretha Franklin, Bette Midler, or any artist. The value wasn’t created by the artists. The value that they create comes back in advertising money. What investors are willing to pay for shares of ownership is completely outside of that revenue. And if I understand correctly, that 2m in shares were merely set aside for McAndrews, he doesn’t own them… that’s not compensation that he’s been paid.

      This isn’t splitting hairs. And neither is Paul’s bogus figures for artists. Lowery’s figure is at a bare minimum half of what he actually got paid. I suspect he’s off by hundreds of dollars. And for the value that he’s creating, Lowery is getting paid well. Very well. Especially as a performer. Lowery’s “hit” (Low), after all, peaked at #64 on the Billboard Hot 100. This week Who Do You Love? by YG Featuring Drake is #64. Should Pandora be paying YG’s mortgage 20 years from now for that? Are you really going to the mat for that?

  7. GGG

    What I find most interesting about this, Paul, is that you know perfectly well how much you fudge these figures. So the question is why? If you know you’re lying, what are you hiding? If you know you’re lying, and feel the need to lie to make Pandora seem worse, do you really even think it’s bad? Or are you just so far over the edge now from the past few years, you can’t change your mind all of a sudden?

  8. and

    RE: artists that earned $0- Every one of those artists earned 0 based on the congressional law that excludes songwriter royalties for music recorded before 1972. The RIAA just brought suit against Pandora in NY to try to retroactively force them to pay for pre 1972 royalties. RIAA also sued Siruis in California under same guise.

    As industry folk, most of us recognize the one sided mischaracterizations, obsfucated truths and outright lies, for what they are. Conflating Songwriter payouts with performance royalties is totally disingenuous.

    This article is nothing more than carrying water for the ASCAPs, BMI’s and the record labels who also own terrestrial radio stations. For shame!

  9. GGG

    Still looking for Paul to respond to myself or JW.