A Famous Producer Asks Pandora, “Why Are You Paying Me So Little?”

jerkinspandora

…at the Code/Media conference last week, during a Q&A with Pandora co-founder Tim Westergren.

Rodney Jerkins: Hey Tim, Rodney Jerkins here.  I asked a similar question to Robert [Kyncl] from YouTube this morning, he kind of gave me the runaround.  So I’m hoping because you’re a fellow musician that you can answer this question:  Pharrell Williams, the artist, made $250,000 from Pandora for ‘Happy’.  Pharrell Williams the producer/songwriter, made $2,700 from ‘Happy,’ off of 43 million plays, which is about 60 bucks per million plays.

What are you guys going to do to change the model so songwriters and producers — the content creators —  get properly paid?  As a songwriter myself, as I’m listening to my songs on Pandora, it’s kind of embarrassing to actually receive these checks sometimes in the mail, that can’t even take care of our family’s monthly mortgage or allowance, knowing that we have a hit song that just garnered 43 million plays across your stations.

So what are you going to do actually change that?

Tim Westergren: Let me tell you — so, speak on that from a couple of different angles.  So one, you’re really discussing  a ratio of performer to composer.  And that has been established by federal law and consent decree over time.  So, 4 percent of revenue goes to the publisher, the composer, about 50 percent goes to the performer, that’s the way the law is set up right now.

We don’t have a quarrel with that ratio changing, that’s not really — should it be different, should it be 50– should it– they be the same?  That’s not really… our quarrel.  And I think that’s to be figured out from the content side, and I think that… performers would say ‘we should get a lot more because we’re on the road 200 days a year,  and we have all these other obligations, it’s fair,’ again we don’t really have a dog in that fight, that’s — that’s to be figured out there, so I think that ratio is one question.

And then in terms of the raw amount, that kind of getting back to what I said before, which is…  so we made a small profit last year, we’re going to do north of a billion dollars next year.  And we have out of a team of 1,500 employees, about a thousand probably whose full-time job is monetization on Pandora.  And we’re giving 50% of our revenue back to the industry.  So we are, sort of working as hard as fast as possible, and are incentivized to do so, certainly as a public company to generate as much revenue as possible.  And a big piece of that’s going back to the industry.

I don’t know what more to do, then, kind of what we’re doing with that, in that regard.

And I think this industry will grow over time, and as the platform and these capabilities I’ve talked about, through Pandora Amp start to kind of take root, and artists understand that, I think it will be, I think this — I think there will be a greater understanding about it.  And not to be forgotten, broadcast radio does not pay performers anything.  So every hour that goes from AM/FM to web radio, this is kind of the big elephant in the room, is a huge positive move for the industry.

You know, radio — broadcast radio is a $16 billion, $17 billion industry that has never paid performers. So–

Walt Mossberg (host): Does it pay songwriters?

Westegren: –it pays songwriters, but not performers–

Mossberg: Yeah but his point is about songwriters.

Westergren: –but he mentioned both.  So I think one of the most positive economic shifts in the industry is this move from broadcast radio to internet radio.

+ June 12, 2013: “Just to Lower Royalties, Pandora Buys a Small Radio Station In South Dakota…

Mossberg: So, we’re really out of time.  But to summarize, he’s telling you to lobby the government about the split between songwriter and performer.

Westergren: For the ratio, certainly.

Jerkins: I mean, your answer is very similar to what the guy from YouTube said as well, and I feel like it’s the runaround.  I do feel that Pandora pays more than the YouTubers and Spotify, but I think once you embrace the creative community, the writers is where the actual content begins.

And you being an artist you know, there’s not an artist without a song, and that’s it.

Mossberg: OK, Tim, thanks very much.

Westergren: Yeah.  Thanks Walt.

 

 


 

47 Responses

  1. Anonymous

    Go lobby the government, really? Maybe just be decent and start agreeing on fair rates with songwriters and stop using the compulsory licenses.
    Oh, and that ratio is interesting … they only pay out 50% to the industry. Isn’t that actually low compared to other services, even YouTube?

    • Remi Swierczek

      Pandora, rest of the Radio and all of the streaming including Spotify can and should convert at once to simple discovery based MUSIC STORE.

      Anyone with contact to Mr. Grange to give him the recipe for this primitive METAMORPHOSIS to $100B music industry.

      Universal switchboard WILL NOT CONNECT even to his assistant, or give you the assistant email!

      I guess they’re already celebrating dead-Beats entry to music DISPOSAL & there’s nothing to discuss.

  2. Chris H

    Almost every conference I’ve attended with the “tech” side represented, this is the essential discourse that happens over and over. Nothing changes because it doesn’t affect them. Shoe on the other foot, they will freely take and modify what they need for their purposes and wait for the lawsuit the never comes because the “content side”, lower than the label/major pub level, never has it’s shit together. You pay the big boys and the rest is gravy, if your “platform” is successful.

  3. Vail, CO

    Mark my words: the publishers will eventually kill Pandora. They just need a little bit of time to get around ASCAP, BMI, and the DOJ. That’s why Time Westergren and every other person at that company are cashing their shares as fast as they can. They know it’s all over in about 2 or 3 years, and they are totally right. But they get the mansion and the yacht so they win.

  4. Anonymous2

    Sounds like Pandora needs to fire about 1000 employees or so.

  5. JTVDigital

    So referring to laws / regulations is a “runaround”?!

  6. Timmy

    Cause…. you know.. Tim is an artist just like everyone else. I mean, don’t you see the guitar in the background in his pictures? He cares!

    • Name2

      Just like that douche at the Grammys who said it would be a real shame if anything happened to that nice “Best New Artist”.

    • Paul Resnikoff

      Ha, I’ll admit that thought crossed my mind when I cropped that pic. But the point you’re driving towards doesn’t make sense. Jerkins’ previous earnings (which are of course substantial) are not relevant to this discussion.

      • Name2

        He seems to believe that 43 million streams should carry the same publishing bounty as 43 million radio spins and a music marketplace where double-platinum == disappointment, instead of Hit of the Year.

        Someone indeed SHOULD tell him that there was the past, and there is the present. How is the past irrelevant when the person speaking is so steeped in its juices?

      • Musician Who Understands

        Paul Resnikoff

        Ha, I’ll admit that thought crossed my mind when I cropped that pic. But the point you’re driving towards doesn’t make sense. Jerkins’ previous earnings (which are of course substantial) are not relevant to this discussion.

        Why isn’t Rodney Jerkins’ millions in earnings – from whatever exploitation of his musical creations they came from – “relevant to the discussion”?

        He’s asking why songwriters and producers get paid “so little” by Pandora, on one hand, and comparing that to what recording artist’s labels get paid, on the other.

        Westergren’s reply was spot-on. Pandora pays what it pays to who it pays because that’s the way the industry is. Not just legally, but in terms of voluntary business deals, as well.

        Rodney participates in recording royalties at a different rate, and at a different level, than the recording artists he produces do. Those recording artists also participate at a different rate, and at a different level, than the songwriters do. They all get vastly different royalty rates, advances, recoupment structures, etc., etc.

        HE asked about the ratio between payments for separate, but tangentially related, rights. Half of which he has no claim to.

        Why isn’t it fair to point out that HE makes a sh|t-ton of money, elsewhere?

        Keep looking at the system through this type of myopic lens and wonder why the whole damn thing is falling apart and there is no hope for updating it for the digital age.

        • JTVDigital

          This is all part of this fool’s game and permanent show-off and search for the latest “buzz” / PR stunt to make some noise and get noticed.
          We can’t blame “artists” since they have to constantly remind they exist and get attention otherwise they’ll virtually disappear and be replaced by the latest trendy new superstar out there.
          Asking the wrong questions to the wrong persons, which leads to meaningless answers relayed by the press, that’s the idea (this is very similar to artists complaining about streaming instead of reading the deal terms from their recording contract with their label).

          • TCooke

            Agreed. Not an intelligent question and basically rhetorical.

        • Paul Resnikoff

          ‘Musician Who Understands,’ you’re edging into ad hominem attack territory. Jerkins is asking a question about, and on behalf of, songwriters and producers. He is using his own payments as an example.

          • Name2

            RJ benefited from a long-entrenched system with no long tail and rich rewards for a very few people at the top of the food chain. It’s ad hominem to point that out? No one’s saying “He’s made enough, already.”, but that historical context is handy. It apparently does have to explained, over and over, that it’s not 1997 anymore. RJ’s “questions” kind of underline that.

            If he were the only man in the world whining like this, then I guess “ad hominem” would be a fair charge. But he’s reflecting a pretty widespread mindset. We hate the game, not the player. But this player is pretty fond of the old game, so what to do?

          • JD

            That is a disgusting comment. He is at the top of the food chain because he is making hit records and you’re not.

          • Musician Who Understands

            Paul Resnikoff

            “‘Musician Who Understands,’ you’re edging into ad hominem attack territory. Jerkins is asking a question about, and on behalf of, songwriters and producers. He is using his own payments as an example.

            I’m sorry. What is “edging into ad-himinem territory about my post? I didn’t say a single thing about Rodney or you, personally, nor did I try to steer the discussion into any character traits.

            I’m saying: If Rodney Jerkins’, a producer/songwriter, can ask questions regarding the various income streams of various players in the music creation business, why then, can’t a commenter here ask questions about various streams of revenue that Rodney Jerkins derives from his various sources as a producer/songwriter in the music creation business?

            Also, I don’t see where he used his own payments as any type of an example. He referred to Pharell’s payments.

            Paul Resnikoff

            “Should probably add that Pandora did take the step of purchasing an actual radio station in South Dakota, just to take advantage of broadcast radio royalty rates. Sort of changes the ‘we don’t have a dog in this fight, call your Congressman’ schtick a bit”

            How does Pandora trying to purchase a terrestrial radio station change their not having a position on the total royalty ratio between songwriters and recording artists?

            Whether they own a terrestrial radio station or not, they still have no real interest in how their total royalty payments get paid out between songwriters and recording artists. All they care about is keeping the aggregate royalty obligation as low as possible. they don’t care WHO they have to pay it to.

            What is your point?

          • Paul Resnikoff

            Ratios, my friend? Seems like you’re falling for the complicated, detail-rich distractions that obfuscate the real issue: songwriters getting screwed. But, that’s not Pandora’s fault, of course, because of the ‘ratios’ that they have nothing to do with. So, I suppose once Pandora isn’t paying anything to the performers like broadcast radio, by the sheer will of crafty loophole manipulation, that’s also a ‘ratio’ problem in the hands of the government?

            Rhetorical babble is an effective weapon, especially if you can’t even recognize it.

          • Name2

            So, I suppose once Pandora isn’t paying anything to the performers like broadcast radio, by the sheer will of crafty loophole manipulation, that’s also a ‘ratio’ problem in the hands of the government?

            You be sure and let us know when that day comes, y’hear?

          • Anonymous

            …or it could be that you’re grossly oversimplifying as usual

            Pandora’s overall royalty obligations are already, as Westergren said, 50% of their revenues and so high they’re barely turning a profit. You cant really gloss that over like its some insignificant detail that doesnt matter if you’re trying to have an intelligent, productive conversation on this issue

          • GGG

            I really don’t understand your aversion to details. It’s bizarre, and always blows my mind, especially for a “journalist.”

            I think everyone, even the people who are arguing against Rodney, would agree that songwriters get paid increasingly worse. But how in the world can you solve the problem without looking at every single issue at hand? A guy writes a song and it gets played on the radio and online. If we don’t look at every hand that’s now in that pot, you can’t solve anything. I don’t get why you look at this as a bad thing…

          • Musician Who Understands

            Actually, rhetorical babble is very ineffective, especially when you can’t even recognize it. Which is why people saying things like “songwriters getting screwed” by Pandora without ANY factual support or context, results in nothing more than a site like this existing, and making no real difference.

            Paul Resnikoff

            “Ratios, my friend? Seems like you’re falling for the complicated, detail-rich distractions that obfuscate the real issue: songwriters getting screwed. But, that’s not Pandora’s fault, of course, because of the ‘ratios’ that they have nothing to do with.

            Yes, Ratios.

            It’s SPECIFICALLY what Rodney Jerkins was asking about. He was specifically asking about the RATIO between songwriters and performing artists.

            And it’s something that Pandora doesn’t care anything about.

            Paul Resnikoff

            “So, I suppose once Pandora isn’t paying anything to the performers like broadcast radio, by the sheer will of crafty loophole manipulation, that’s also a ‘ratio’ problem in the hands of the government?

            Rhetorical babble is an effective weapon, especially if you can’t even recognize it.”

            Wait….

            WHAT?!?!?!?!

            Now, you’ve concocted a world in your head, in which Pandora – merely by owning a terrestrial radio station – won’t have to pay “anything to the performers”?

            Please, indulge us. Explain how you think Pandora, upon owning a terrestrial radio station, won’t have to pay “anything to performers.”

    • Anonymous

      counterfeit A grade watches are pretty big on that part of the world, what looks like a $45k watch might actually only be worth a few grand…

        • Anonymous

          “only worth a few grand”?

          Hi, im sorry, i dont understand the question, please elaborate and i will be happy to answer you in a calm and cool, classy and gentlemanly manner.

          thanks!

  7. Anonymous

    its all confusing and a little bogus.

    Simply put, a fair way to do it i guess would be to take that 100% of gross revenue and split it 50/50 between master rights and publishing rights, and then ship it off to the perspective owners and then let them ship it off to who should get it based upon the splits agreed to.

    All this silly stuff going on just seems like super middle management middle man whittling and cutting and shaving points and money off of something that should be so easy.

    All this stupid compulsory licenses and this and that. Gross revenues, 50 to pandora, and then 25 for the masters and then 25 for the publishing, then pandora can pay its expenses out of that and pay its employees and then see what it has left, if anything. They may also have to pay an upfront license fee to use the masters for certain catalogs and songs along with an ongoing royalty for spins. Thats how it probably should be, but it is what it is.

    50% to the performers? Really Tim? Thats an out and out lie and misrepresentation of how it all works or at worst a very vague and misleading statement that makes no sense. Performers arent guaranteed anything, performance royalties are royalties based on the performance of the song which typically makes it way into songwriters and composers and publishers pockets. Performers maybe get a one off fee for performing. Artists might get 15% of the masters, mechanicals, from their label, after recoupables.

    So i mean, talk about dragging the feet to fill the coffers…

    • Get a Clue

      Anonymous

      Go lobby the government, really? Maybe just be decent and start agreeing on fair rates with songwriters and stop using the compulsory licenses.

      Why shouldn’t he use the compulsory licenses?

      Why shouldn’t artists be “decent” and let him only have to pay a lot, for the few big hits – and get all the other crappy songs and recordings that no one asked for, but they put in everyone’s station anyway, for free? Now, THAT would be “decent.”

      Anonymous

      Simply put, a fair way to do it i guess would be to take that 100% of gross revenue and split it 50/50 between master rights and publishing rights, and then ship it off to the perspective owners and then let them ship it off to who should get it based upon the splits agreed to.

      Riiiiiiggggggghhhhhtttttt…..

      …and who pays for the programming of the service, the servers, the bandwidth, the promotion, etc., etc. etc.?

      50% to the performers? Really Tim? Thats an out and out lie and misrepresentation of how it all works or at worst a very vague and misleading statement that makes no sense. Performers arent guaranteed anything, performance royalties are royalties based on the performance of the song which typically makes it way into songwriters and composers and publishers pockets.

      U.
      R.
      Domb.

      He didn’t say 50% “to the performers.” He said 50% back “to the industry.” That means perfrming artists AND songwriters.

      You don’t understand the difference between a performance royalty for a song and a performance royalty for a recording. Pandora – a digital service – pays both.

      Please shut the “F” up until you have even a vague understanding of how even some of this works.

      • Anonymous

        please stop with the schoolyard bullying and please provide some constructive criticism or else simply cease and desist from such defamatory actions.

        this is a perfect opportunity to elaborate on the points you feel i am incorrect, to educate myself and others, and to better convey your point.

        there is simply zero reason for treating me like this.

        thanks.

      • Get a Clue

        please stop with the schoolyard bullying and please provide some constructive criticism or else simply cease and desist from such defamatory actions.

        this is a perfect opportunity to elaborate on the points you feel i am incorrect, to educate myself and others, and to better convey your point.

        I did. My response pointed out your mistakes and why they were mistakes.

        You made the ridiculous and obviously unsustainable suggestion that Pandora pay out a full 100% of its revenues.

        You obviously didn’t read/misquoted/don’t understand Westergren’s response. He didn’t say he paid 50% “to performers.”

        You clearly don’t understand the distinction between a sound recording performance right/royalty and a musical composition performance right/royalty, or that fact that Pandora, a digital service, pays both, while terrestrial radio only pays one.

        I mean, really… How much more clearly could I have pointed out your multiple mistakes AND provided the correct facts?

        there is simply zero reason for treating me like this.

        On the contrary, there is a very good reason for “treating you” (i.e. responding to your post) you like this.

        You chose to post about a highly nuanced topic, without knowing anything about it. and obviously without even carefully reading the initial story that you were commenting on.

        That deserves to be called out.

        Honestly, you should feel ashamed for otherwise muddying up the discussion among those who actually do understand these issues.

        If you really are interested in these issues and discussing them in an informed manner, you should be willing to take a little time, read a lot about it and educate yourself – BEFORE you wade into a discussion thread and start lobbing nonesense posts.

        Thanks.

    • Anonymous

      You have literally no idea what you’re talking about

      • Anonymous

        You have literally no idea what you’re talking about

        Hi there,

        then please take the opportunity to let everyone know why i have no idea what im talking about.

        thanks!

  8. Anonymous

    I find it hilariously sad that songwriters and producers keep asking why Pandora doesn’t pay more when there is substantial evidence that Pandora is already paying more per listener than terrestrial radio. Why keep going after someone who is already the underdog whether or not you like to admit it? No one even seems to question what Pandora’s radio competitors (both terrestrial and other internet broadcasters) are paying.

    • David

      If you haven’t been living under a rock, you should know that record companies and artists have been actively lobbying for terrestrial radio to pay more. At the moment, the USA is the only democratic country in the world where terrestrial radio does not have to pay royalties to recording artists.

  9. Anonymous

    isn’t this kind of an extension on DRM? And that didn’t work out well, did it?

    how do you implement a system like this? Are the Verified Accesors websites (like YouTube or Spotify) or the end users (like me)?

    Would love an explanation because, from what you describe here, it sounds as unrealistic as Remi’s discovery payment system – see where you’re coming from but it doesn’t make sense in the real world.

    • Anonymous

      It is entirely unrealistic. I don’t even know where to begin arguing why.

    • JTVDigital

      This sounds completely unrealistic indeed. It would mean everybody would need trusted certificates for playing music.
      There are ways to eliminate links from the various YouTube or Soundcloud rippers / online mp3 converters, at least de-indexing these from Google with DMCA notices and other techniques make it invisible and useless.
      It has a cost, but it works pretty well.

  10. Cleverer

    Why are streams publicly counted but downloads aren’t?

  11. john

    bravo to this guy for trying to stand up to all the mansion scum in this industry.

  12. Truth speaker

    you no we are just all bums that are taking what we can get. Think about it if it wasn’t for these streaming services everyone would just be stealing music like they always have for the last 10 years. It would be nice if the royalties or greater but we are in such a messed up situation where music has been so devalued.

  13. R.P.

    Get a job, like everyone else.

    P.S. I wouldn’t call this guy “famous”, anymore…

    • Anonymous

      Get a job, like everyone else.

      P.S. I wouldn’t call this guy “famous”, anymore…

      What does this have to do with anything? Why do you people use this technique all the time?

      What in your life has happened so bad to you that is causing you to be like this?

      If you look at his credits, he obviously has a job and a career, and the thing with music is, as anyone who knows anything knows, you can have a job and a career while not making any money, so im pretty certain most of us are quite tired with that.

      Its usually put forth by someone bitter and jaded as well as someone who possibly was damaged as a child, whether through abuse or not or else someone who is benefiting from the decimation of a certain job, career or industry.

      Think about this for a moment. A company is formed to handle some business, some employees are hired to work a job which might be part of a career, they get paid while working but the company ultimately just loses money all the time non stop, just losing money all the time, so just riding on debt and credit until they go belly up, but yet those employees are suddenly better and more worthy then someone taking a go at it themselves or then an independent contractor who owns his own business and tools, suddenly that independent contractor who assumes the risk themselves and who has more responsibility and more worth and value within society, suddenly to so many of you sorts of people, becomes useless and worthless and yelled at to go get a job because they arent being fronted money by someone or getting a paycheck from a losing company. It makes no sense, im sick of it… People get hammered all the time yet some of these superstars are just getting money from a losing company, most doing significantly less, and yet they get to make fun of others, tease, bully, intimidate and threaten, all because they chose not to own their business and instead take a handout from a losing company?? It just isnt logical.

      This guy is simply putting forth a question, none of his person stuff, how much he makes, where he is at in life, and certainly your opinion on the capacity and necessity for the job, none of it matters, it is a job and a career and whether you like it or not, there are questions to be answered and solutions to be implemented and changes to be made.

      Your jealousy or bitterness or jadedness or else your benefit from that jobs termination, are not anything worthy of consideration and are not any reason to allow and celebrate such toxic unhealthy treatment of people.

      Are you people not adults??? I say some clips on Connie Chung going at Tanya Harding, damaging her career and reputation, and this celebrated respected revered reporter was acting like a kindergarten kid on a playground, it was embarrassing as a human being to see such a deity among reporters and journalists who is placed on a pedestal act like such a baby, i was truly embarrassed for us, and not to mention ruining someones life based on mere gossip and assumptions and jumping to conclusions. Im so tired of especially the americans continued desire to be schoolyard bullies.

      There is simply no need for it. I dont see him asking or looking for a job, i dont see him doing anything other then making a point and looking for answers, answers that all those tech people conveniently avoid and sidestep at every turn possible, all who then use lame and boring rhetoric like yours. Im telling you, some people will eventually snap and take matters into their own hands if all these people like this go get a job guy are allowed to continue free from punishment, and they will start becoming violent against such people, so id be careful out there, bawse!

      And what about this suddenly makes him not famous or famous? How would this one article and question he asked at this one conference suddenly something that would either make him famous or make him not famous?

      I dont get it, this makes no sense, who are you even talking about??? If you are talking about someone different, you might want to say as such…

      • Name2

        Jerkins is defintely and definitively famous and successful.

        What should be questioned is whether the headline as crafted by PR is rhetorically loaded, making calm discussion of the FACTS difficult.

        “[Famous person] [complains about] [payouts | streams]” is one of DMN’s five or six reliable go-tos.

  14. Music Biz Attorney

    There’s a very simple answer to Mr. Jerkins’ complaint: an artist typically hires a producer, and the producer’s rightful share of streaming income received by the artist is from that artist (or the artist’s label if that’s who he contracted with to produce the recording concerned). Any producer with decent representation is going to have this covered in his agreement to produce the recording concerned. Pandora may or may not accept a letter of direction from the artist or label to pay directly to the producer the agreed-upon share, but one way or another, the ultimate source of the producer’s payment is the revenue received by or credited to the artist that’s attributable to that recording.

  15. Willis

    The real question here is “why are artists/producers willing to accept the terms, and not just pull a Taylor Swift?”