That’s according to Marty Bandier, CEO of the largest publishing group, Sony/ATV. Here’s a copy of a letter Bandier sent to all Sony/ATV members this week, which includes the calculation.
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Music Streaming is what I’ve termed “The Demon of the Music Industry.” Artists need to Stop feeding these Monsters!
Pandora already pays at least 70% of gross sales to copyright owners. That seems on the high side of fair. If the recording owner is getting paid too much of the 70%, why is the songwriter/publisher’s fight not with the recording right owner, instead of the service that is already paying 70% of gross sales?
You can’t remove your property from Pandora.
That makes it a piracy site, for all practical purposes.
It needs to be shut down like MegaUpload and Pirate Bay.
The logic here is twisted. Pandora is actually obeying the law. Piracy is about stealing, against the written law.
Whether Pandora is obeying good ethics, however, is a separate issue. Ethics actually receive little weight in our current business environment, and that includes the use of loopholes and gray practices to screw people and the environment, while enriching a small group of stakeholders. Let’s face it: the real way to break a law is to obey it.
Ethics, fairness, morality, and transparency. This is what I think people — and in particular rights owners and musicians — are demanding from people like Tim Westergren. So far, they haven’t received it.
“The logic here is twisted”
No it’s not, Paul:
Pandora and other companies that use music without permission from the owner have to be shut down.
Yes, the laws need an update first, and that’s not a problem — the landscape has changed significantly during the past decade and new legislation is required now.
My music, my choice!
Pandora is not a piracy site. That is slander. Pandora plays by the rules. You should play by the rules and stop slandering the good, honest, hard-working people at Pandora.
We get that you want to change copyright law, but until the law is changed, you should stop making statements of fact that are designed to harm law-abiding people/companies, especially ones that are putting billions of dollars in the pockets of your brethren. Copyright law is not perfect, but it could be way worse.
“Pandora is not a piracy site”
Sure it is:
Pandora streams music without permission from the owners, makes money in the process and doesn’t respect takedown notices.
That’s piracy my friend, and that’s why it has to be shut down.
My music, my choice!
Ya lets shut down Pandora! They made $431,000,000 in 2013, which was up 56% last year. Of that money, roughly 70% was used to pay royalties. That’s $305,000,000 paid to the music industry! Shut them down, we don’t want their money!!!!
In all seriousness, this guy is an idiot. Pandora is not playing music without artists permission, if an artist doesn’t want their music played – (e.i. Taylor Swift on Spotify) – then the service must take it down. The issue is not piracy – it transparency. It is obvious that Songwriter’s are not getting paid, no one argues that; however, the misconception is who is to blame. Many blame Pandora; however, one must ask who pays songwriters? – Their publishers.
However, the issue doesn’t stop there. It’s not the publishers fault, its the record company’s fault. Record companies sacrificed their publishing entities so that the record label could get paid. Pandora has done nothing wrong, in fact they have done everything by the books.
With that said a still issue remains – how can songwriters be fairly compensated. Record labels take 90% of the income Pandora pays in royalties, and Publishers take 10% of what is left. Half of the publisher’s income is split with writers. Are we going to make Pandora pay 110% of it’s income for royalties? No. Are record labels going to give up 40% of their income to publishers to make things fair? No. Are we going to continue running around in circles complaining about Pandora and not figure out a solution to this dilemma? Yes.
Slander again. I guess you don’t care much about breaking the law.
100% of the music on Pandora is properly licensed under current law (i.e. Pandora has legal permission to play it). As a non-interactive service, operating under the compulsory license applicable to all non-interactive services, Pandora is LEGALLY entitled to play ANY music released in the United States. That is the law. Pandora complies with the law and is therefore NOT A PIRACY site.
*cough* pennies would be nice, but the music industry deals with hundred thousandths of a penny *cough*
I think music streaming and Radio is the BIGGEST OPPORTUNITY OF MUSIC INDUSTRY!
Please do not demonize such a great business opportunity.
Pandora is at: my home, my office, my doctor’s office, local pizza shop and at my dry cleaner! Yesterday my Croatian baker disappointed me with iHart Radio.
It is unbelievable OPPORTUNITY: let them play as good as they do and BRIBE (or LEGALLY FORCE) all 50 (fifty) music and lyrics ID services like Google, Shazam, SoundHound and 46 equal idiots to FISCAL SANITY.
Radio and streaming converted to music store with 2 billion users of music ID services will deliver $100B music industry by 2020.
EFFORTLESSLY at just 39¢ per tune. $50B YouTube as a hub of $100B music industry is much better than current music prostitution.
Larry Page has the best moonshot he ever seen in his life.
Well he must be blinded by ads or misinformed on real music opportunities.
“Pandora is at: my home, my office, my doctor’s office, local pizza shop and at my dry cleaner”
But it doesn’t pay, and it’s never going to.
That’s why it has to be shut down now — just like any other site that streams music without permission from the owner.
Your statement is incorrect. You are spreading misinformation. Pandora pays more than 70% of its gross revenue to copyright owners and has paid more than $1 billion to copyright owners so far.
Quite spouting your tribble. 70% of it’s revenue that comes from ads and subscribers is nowhere even close to what the value of their product is. They are legally ripping off artist and your the guy rooting them on. Just like Spotify, a failed business plan that “loses” money yet everyone that works there doesn’t take the hit, the artist supplying the product does.
Compared to the rates radio services in other countries pay (ex. Canada) it’s pretty safe to say Pandora is paying too much.
“Music Streaming is what I’ve termed “The Demon of the Music Industry.””
Well, the right business decision for artists today is to follow Taylor Swift and other succesful mainstream artists and simply stop streaming, either permanently or during release (windowing).
But regular streaming sites should never be compared to Pandora:
Artists can choose not to use Spotify and similar sites, but Pandora is a piracy site — e.g. it does not respect takedown notices — so it should be shut down like MegaUpload and the Pirate Bay.
How much revenue overall did that number of streams generate?
Paul, thanks for posting this. This is Royalty source #2 of the 4 possible to an artist.
To review, the 4 potential sources of streaming income are:
1. Sale royalty, paid by streaming entities to the distributor of the material and then paid to artist or label depending on who set up distribution. It is the highest royalty rate paid for a song.
2. Songwriting royalty paid through PRO such as BMI or ASCAP. At the rate above for the Pharrell hit and paid by Pandora to Pharrell’s PRO, the rate was .0000613 of a dollar per stream of the song. It is apparently the case, these rates will vary with each service. Can we be confident that because Xbox pays a much higher sale rate, that their songwriting rate is higher too?
3. Performance royalty paid through Soundexchange.
4. Mechanical Royalty paid through various middleman agencies.
There is documentation online elsewhere stating that the combining royalties 2 thru 4 above for most on-demand streaming should equal .008 of a dollar per stream. So almost a penny. If Xbox is paying 3.3 to 3.8 cents per stream (which they are), then combine with the near additional penny, an artist, if they wrote, own, control and perform their own recording, then they could be paid nearly 4.8 cents per stream from Xbox.
Where’s the problem with that? Microsoft is kicking ass paying at an exceptional rate. It’s not a record sale, but it’s on-demand streaming and all that that implies. A smart artist will figure that out, essentially subscription fees vs. potential source of revenue.
Also, just to chime in the Amazon Cloud Service, we just saw our first numbers from that for on-demand streaming.
Amazon Cloud Services is paying .000282 of a dollar per stream. We are assuming the songwriting and other respective royalties even more ridiculously low, but won’t know for another 9 months.
Is this for streaming under Amazon Prime Music, or titles in the cloud due to “AutoRip”?
Because if someone’s listening thanks to the auspices of AutoRip, they’ve already bought your CD.
The Amazon Prime music service or their cloud/storage service?
I’m no expert on the Amazon service, so correct me if I’m wrong, but doesn’t it just enable you to play tracks you have already purchased? I’ve bought a lot of tracks on Amazon myself over the last 10 years, and I was delighted recently to find they are all available to stream or download in my ‘Music Library’, even when I have lost the original download (it happens!). If that is all it does, it can’t properly be compared with services like Spotify, and I think it is reasonable that the payout per stream should be relatively low.
It should really be zero, because it’s like charging an extra fee every time you play back something you already purchased.
A $99/year Amazon Prime now comes with a Spotify-like service which allows you to stream on-demand music you haven’t actually bought. The catch is that Amazon isn’t even pretending to “have everything”. I’ve looked for some of my favorite artists and found maybe half their albums available.
Amazon also offers
1) cloud storage for stuff you haven’t bought from them. (You upload, and listen on up to 10 systems/devices)
2) cloud storage for downloads you HAVE bought from them.
3) (title-dependent) Physical CDs that you purchase from Amazon may have an “AutoRip” option: as soon as your CD is delivered, an MP3 copy of it is stored in your cloud.
When this last service was introduced, they went back and uploaded a lot of your physical purchases, even ones made before the service was introduced. I logged in one day and found “you have 1,800 new songs in your library.” WTF? Pretty awesome, actually.
Why do these people always always always fail to specify on-demand vs. radio/fed/shuffled streams? Higher and lower resolutions? Free and paid tier? (Does Pandora even offer tunes on-demand?)
When I see that info omitted, I stop reading. All the further numbers are meaningless.
Because it’s the music business.
And how much money do songwriters/publishers make when 1,000,000 people hear a song on terrestrial radio? Everything I have seen suggests the number is under $60. Similarly, everything I have seen suggests Pandora actually pays more than $60 per 1 million plays to songwriters/publishers. Perhaps some of it is being lost along the way?
Bashing Pandora while terrestrial radio who is the real elephant in the room pays less is just stupid. Apparently some other major internet radio services also pay less because they are owned by terrestrial radio companies.
In its advertising to the public, Pandora claims it is very different to ordinary radio. It allows users to choose preferred artists, it allows skipping of tracks, it allows particular artists to be ‘banned’, etc. So either Pandora is lying to the public, and should be prosecuted under truth-in-advertising laws, or it really is very different to ordinary radio, and cannot expect to pay the same royalty rates.
“how much money do songwriters/publishers make when 1,000,000 people hear a song on terrestrial radio?”
Depends on the country.
But thank you for bringing this up — companies like Pandora and radio stations that stream music without permission from the owner need to be shut down.
And yes, radio was indeed great back in the day when exposure was hard to come by.
But perhaps you’ve noticed that things have changed, and monetized exposure is available for everybody on YouTube now.
So terrestrial radio (and Spotify) is not only useless today, it also cannibalizes sales, and owners should be allowed to opt out.
My music, my choice!
“So terrestrial radio (and Spotify)”
EDIT: That should read “So terrestrial radio (and Pandora)”.
as a respectful human being i should also be able to opt out from being ass reamed, but alas, i cannot, and actually its allowed and celebrated, like im in fucking pulp fiction or something, luckily im more like bruce willis so its someone else being ass reamed in that sense, but metaohprically its a constant every fucking planck time im being constantly just constantly constantly ass reamed by a train of assholes just constantly ass reaming beyond any recourse… people are betting on it like she picks her horse down at the track…
no doesnt work, nothing seems to work, they are just allowed to continue ass raping all over the place but specifically to me on a whole new level of ass reaming… its terrible… my ass is gaping bigger then a black hole to a new universe, a portal a fucking air craft carrier could sail through… its brutal…
and they all slap high fives and love it more and more as each day goes on, just constantly ass raping me…
all metaphorically of course, but thats what these smarter rapists do these days, do it in ways they can get away for it and within their circles celebrated for…
its awful… you could look in my ass and see out through my mouth like the fucking hubble telescope…
they just want to hear yes and then they will dangle me on the end of their hook like a piece of dead meat bait for their gain and pleasure and enjoyment again, so just another raping really…
ass rapings all over the place these days, just constantly being constantly humped upon anally, its brutal, it never stops, just constant ass reaming all the time it slike im a fucking pornstar just getting burtallized in the ass constantly like all the time constant ass reamings all over the place and the best part is they are awarded and rewarded and celebrated for it just constantly, im the victim yet am treated like the criminal where they threated to throw me in prison just for being an honest hard working law abiding citizen where id be ass raped some more all because i dont want to be ass raped aymore?? i dont get it man its like all the time constantly with this ass reaming everywhere and no matter what i do its like theres a butt plug in my ass at all times but its like the size of a telephone pole and it vibrates, its awful and constant like constantly just constant ass reamings everywhere… like what the fuck man always with the ass rapings like what the fuck no wonder those guys back in the day humped the shit out of sheeps and stuff like that and now i guess they think im a sheep and decide that if done metaphorically they will get away with it so they just hump away on my ass all the time just constantly its terrible and then they sheer my wool, but im not a sheep, but they think i am so they think they are sheering my wool which is really something else but damn and then they just keep constantly reaming and reaming and reaming away….
Thanks, DMN. Your commentariat makes me feel one thing I thought I’d never experience: sympathy for label execs who have to listen to this whiny, dribbling shit from the “talent” all day.
+1
Pandora is a radio station, you don’t get to pick which tunes you get to hear – just like terrestrial radio. I’d like t see a comparison to a big terrestrial radio play where the number of ears “reached” is factored into this discussion of payouts. If an artist gets one spin on Hot 97 during rush hour in NYC and it reaches a million listeners ears how much is paid out for that one spin? $60? $10? I doubt it. Somebody show me!?!?
Agree 100%. Plus we all know that radio pays $0 for sound recordings. Radio is today’s pirate and they need to step up if they want to continue playing our music.
Our Music, Our Choice
Name me a terrestrial radio station where you can do this: http://help.pandora.com/customer/portal/articles/84831-create-a-station
Agreed that Pandora isn’t the same as terrestrial radio, because it does offer a limited amount of interactivity. But, it’s also not a completely interactive service like Spotify. Like commenter “terrestrial”, I’d like to see similar “per million listeners reached” numbers for terrestrial radio, as a point of comparison. That doesn’t mean Pandora’s rates should be the same, but they should probably fall somewhere between rates from terrestrial radio, and interactive services like Spotify. I wanna see a spectrum of 1 million listens on each platform: terrestrial, non-interactive digital, semi-interactive digital (Pandora), and interactive digital streaming. How much is the composition royalty for each, as well as the artist royalty?
$60 per million listens on Pandora does seem low, but without similar stats from terrestrial radio, I’m curious how far of it really is. The way ASCAP and BMI calculate payments is complex, and I can’t seem to find any info on estimated “per million listeners” rates. But, I’m sure the PROs know this number, so they know how much to charge radio stations for license fees. One thing’s for sure. Terrestrial radio should be paying artists for sound recording licenses. The current lack of performance right for recordings is some congressional BS.
Give me one good reason Sony should make more than that from Pandora
I seriously hope you guys dont buy this self-serving crap
Yes it is extremely self serving. My first reaction after reading this was Sony is playing some pre-emptive PR. They don’t want their artists/writers who are signed to oppressive contracts blaming SONY and posting angry comments on DMN about how they get paid so little.
This way SONY gets to say “See, it’s all money grabbing Pandora’s fault NOT that horrible contract you signed with us that doesn’t allow you to audit our cut of the pie.”
What Banier fails to understand is that while the music industry was fighting digital for 20 years that they could have been working on new business models providing solutions to the plight of the songwriter. Instead, digital distributors had no real incentive to work with labels and publishers since they were made into adversaries. In the interim, fans have become accustomed to the idea that music should be free and therefore, there the pie is much much smaller and new business models will have to be invented which will not allow large amounts of revenues sufficient to operate large record labels and publishers. SONY/ATV will simply have to pay more of its share to songwriters and downside their operations substantially. Pandora is not profitable and their business model is flawed – they will NEVER be profitable and will lose even more money if Bandier gets his way. Approaches like the one Bandier suggests simply have no place in today’s industry. Bandier is simply ignoring the facts. Pandora as a free standing company will not exist by 2016. They will either be absorbed by another company or run out of cash or will be purchased by a larger company and rolled into their existing radio/streaming platform.
Revenues from the exploitation of songs have cratered specifically because people like Bandier lacked the vision to work with digital distribution from its onset over 25 years ago. People now think that music is free. Income fro the exploitation of songs is now a small fraction of what it was. Now all the geniuses that fought digital are nostalgic for huge piles of cash they used to collect. Hilarious. How can you ask for a bigger cut from a company that is losing money to begin with? How dumb is that? Pandora’s business model is fatally flawed, they will never make money as a stand alone company and will be bought before the end of 2015. Their stock is heavily shorted and the end is near. Potential purchasers? Google, Apple, Amazon, Yahoo, etc. Hey Bandier, if you like “negotiating” with Pandora you will LOVE negotiating with Google. LMFAO
I would have liked for Sony to go after Eric F. Vermote who pirated music despite the fact he makes over 110K per year working for the US Government! On the web it goes without really further developing that digital pirates take strategic measures for them to avoid getting caught difficult to prove in any court; Vermote is a good example for that because with his professional IT skills he easily got me wrongly convicted of French Press Defamation in July 2011 for a blog post I released mentioning peer to peer digital music piracy he committed and bootlgegging acts of his during 2003-2004 in Maryland implicating his US Government employers NASA & UMD which never worried much about the matter despite the piracy case they were part of really occured but without a trace, “strangely”…(Eric F. Vermote actually entirely denied having ever performed digital piracy in any form in his French Press Defamation Direct Complaint against me in order to keep his jobs as a IT specialist who develops computer software for the US Government). Above all this the French authorities don’t investigate foreign matters of this type. Another good example related to the international “unfair system” of cases like mine is that no official French word translates for “bootleg” in the French judicial or legal vocabularies…GOOD LUCK to Sony trying to assist musicians for them to earn minimum wages for their work! I deeply stand by the artists’ side like you Mr. Bandier and this globally.
This is such BS… why don’t these figures ever include PERFORMANCE ROYALTIES????? An artist as popular as Pharrell will make MILLIONS from Pandora in 2014.
How much should a person make per play? I mean, seriously, it’s one person listening to it one time.
pandora, spotify and all internet streaming services should pay a lot more so the artist can thrive therfore more abundance creating a mass flood of talent an money beyond imagination. but there is always the greedy ones who always have their way…