Pandora Says They’re Actually Paying Artists $1,300 a Spin…

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…from a recent interview with Pandora cofounder Tim Westergren, in an interview with Re/Code’s Walt Mossberg.

Walt Mossberg: Why are there lots of artists and labels that really don’t like you at all —

Tim Westergren: [laughing]

Mossberg: — and want to force you to negotiate deals with them, and feel like, despite the billion dollars that you pay, what they’re actually getting for each play of their song is… way below what it’s worth, and not enough to make a living on, and all the rest.

Westergren: Well I think there’s a handful of things at play, one of course the music industry is losing its primary source of revenue, the CD sale.  We’re moving from a $20 item to a $1 item —

Mossberg: — but that’s not news, Tim —

Westergren: — that’s not news —

Mossberg: — that’s been going on for a while.

Westergren: — and it’s not of our creation, and it’s — but it’s continuing to create… economic, it’s undermining the industry.  So it’s an emotional time, and it’s a time when the industry is looking for ways to replace that revenue.  And it’s —

Mossberg: So for a while they thought they’d replaced it with iTunes.

Westergren: Right, but now that’s — that’s gone south now.  So I think you start off with a sort of charged environment.  And then, in terms of the royalties, it’s easy in that environment to sort of misunderstand things.

Misinformation can get easily amplified, and artists can develop a flawed notion of how these businesses run and what’s good and what’s not good for them.

I think the way to look at Pandora is, this is a company that’s building a product that consumers love, 80 million plus a month, we are working tremendously hard to build a business behind it.  We’re projecting over a billion dollars in revenue next year, we have this massive ad sales force and a bunch of technology investment in it.  And we’re sharing that revenue, very fairly I think with the artist community.

Mossberg: Well, but I’m asking you, why a lot of them don’t think it’s fair?  You think it’s fair, I get that.

Westergren: There’s a simple reason for that —

Mossberg: — you seem like a nice fellow, and you think it’s fair

[laughter in audience]

But they don’t think you’re being fair with them.

Westergren: There’s a simple reason for that.  You can write a headline that says ‘My Song Got Played This Many Times on Pandora and I Made This Much Money.’  And what it does is it fails to understand that a single play on Pandora is a play to an individual, where a play on radio is played to hundreds of thousands of people.

The actual apples-to-apples number is more like $1,300 a play on Pandora.

So that, all by itself, has created a lot of misunderstanding of the business.

Mossberg: That’s the notional apples-to-apples number.  Not the actual number.  What’s the actual number?

Westergren: No, no — it’s approximately, if broadcast radio paid the same royalty that we were paying, it would be in the neighborhood of about $1,300 a spin, on broadcast radio.

Mossberg: But that’s a kind of ‘if’ thing.  I mean, the actual royalty they get every time their song is played on Pandora?

Westergren: It’s a fraction of a penny, per play per person.

Mossberg: Well, some people don’t think that’s fair.

Is there anything you’re going to do anything about that?

Westergren: Well I think that what will happen over time is, the royalty will be sorted out, we have multiple places to do that.  And looking forward, as we develop these platforms, where artists are using this to reach fans, to harvest their audience, the benefit of this will become I think increasingly clear.  And I think the debate around royalties will be put in that broader context, and I think it will make a lot of sense to people.

Mossberg: And, just quickly, because the clock’s running down… the royalty will be sorted out means what?  Are you are open to raising the royalty?

Westergren: So there’s an arbitration process where this is handled.  So there’s actually a hearing, dispassionate judges determine what it is, or it’s done through the direct negotiations.  So there’s actually a mechanism for sorting it out.

Mossberg: [looking disappointed and unconvinced]

Okay.

 

90 Responses

  1. Remi Swierczek

    He should just act and convert his outfit and rest of Radio and streaming to primitive music store!
    This action will quadruple his Pandora stock holdings and ail bring a lot of happiness to everyone

    If he does’t act communist fractions in music industry will sooner or later cook congressional decree that will in the red no mater how fashionable he is on the Wall Street.

    Tim,
    Just be fair to you own greed, who cares about stupid musicians! Go for it!

  2. GGG

    This is the most pathetic click bait headline I’ve seen on this site, and that’s saying something.

    I don’t even defend Tim or Pandora on here ever, but do you ever want to be taken seriously? The worst part is, he’s clearly making a point that you can still argue against. It’s still only $1300 for “hundreds of thousands” of spins. Even at half a million spins, that’s only 2 tenths of a penny.

    • Paul Resnikoff

      GGG, I’m not sure I agree with that. The $1,300-per-spin information is, well, bad spin, and Mossberg was forced to debunk such obviously ridiculous misinformation. Honestly, I think Pandora needs a media consultant, this ‘talking point’ needs to be incinerated.

      • Mike Corcoran

        Do we know the $1,300 per spin is “obvious, ridiculous misinformation”? Would you know what the FM broadcast royalty is, on a person-for-person basis?

      • Anonymous

        The only misinformation here is your ridiculous clickbait headline that you based on a quote taken totally out of context

        Westergren kinda duffed this question I think but he had a good point – he was trying to make a fair comparison between Pandora and their competitor in broadcast radio. Which, since as he pointed out Pandora plays are generally reaching one or a few listeners and broadcast radio reaches hundreds of thousands, would be 100,000 Pandora plays to one spin on broadcast radio.

        If he’d done a better job of answering this question, I think that comparison couldve made Pandora look pretty good since broadcast radio pays LITERALLY NOTHING to performers and probably even less per-person, per-play than Pandora to songwriters

        If you wanna argue that both Pandora and broadcast should pay more per-person, per-play in order to be “fair” to musicians, then by all means argue away (and like GGG said there’s probably an argument to be made there) but taking that number wildly out of context doesn’t add anything meaningful to this discussion

        • Mike C.

          I don’t have a problem with the clickbait headline – anyone in music could’ve seen what he was alluding to. Actually not all that ridiculous a headline (for DMN). But I do agree with most everything else you said. Westergren obviously meant 1 million listeners is worth about $1300 on pandora, which is about the same number of listeners that one spin on FM radio reaches in New York or L.A., something like that….

          now, whether this rate is accurate or not, i don’t know…but it doesn’t sound so ridiculous..

          • Anonymous

            I think you’re being pretty charitable about the headline but yea Id be interested to know both exactly how many plays Pandora is using as a stand-in for a broadcast spin and what broadcast actually does pay in performance royalties on a spin. Definitely wish Westergren had pushed his point harder when Mossberg followed up about fairness instead of waffling

        • Mike C.

          I don’t have a problem with the clickbait headline – anyone in music could’ve seen what Westergren was alluding to. Actually not all that ridiculous a headline (for DMN). But I do agree with most everything else you said. Westergren obviously meant 1 million listeners is worth about $1300 on pandora, which is about the same number of listeners that one spin on FM radio reaches in New York or L.A., something like that….

          now, whether this rate is accurate or not, i don’t know…but it doesn’t sound so ridiculous..

        • Paul Resnikoff

          a quote taken totally out of context…

          Huh? You’ll never see a quote more in its actual context than in this article.

          • Sarah

            I think he meant the title. Which deliberately misrepresents what Westergren actually said – anyone who saw the headline without reading the story would have a factually incorrect understanding of what he said, because of your deceptive title.

      • GGG

        Pretty obvious to me, coming after a comment about a Pandora spin being to one person, that he was saying if a Pandora spin hit the audience a radio station hit, it’d be a $1300 play. I’ll even agree that you can argue the relevance of that point. I think it makes sense to bring up, but it certainly doesn’t strengthen Pandora’s stance at all, just goes against terrestrial radio.

  3. Name2

    I usually respect Mossberg, but what doesn’t he get about the fact that a stream is a song played one time for one person?

    • Culls

      I agree – unicast vs broadcast is at the center of this foggy math argument, and Mossberg not only doesn’t get it, but seems interruptive and combative.

      • MC

        Agreed. Mossberg seemed more interested in scoring points for the rhetoric of the day. This is the first time I’ve heard Westergren make an apples-to-apples comparison to broadcast royalties, and I didn’t hear anyone call out the broadcasters for their comments or comparison numbers..

        • Remi Swierczek

          Whether it is one stream to one human done 1.3M times or singe broadcast over the air to 1.3M New Yorkers the numbers we’re discuss and the demands we make in Washington will create LILLIPUT music industry. $25B in 2025 is the most optimistic outcome.

          We need to turn off displays for anything that does not belong to consumer playlist and start charge for addition to those playlists. With current stream and broadcast numbers Radio and streaming converted to [music store] can and will deliver $100B music business before 2020 at just 39¢ per tune.

          Google, Apple, Amazon or UMG – the arsonist, are the only possible executors of this bright and logical future!

  4. Anonymous

    And we’re sharing that revenue, very fairly I think with the artist community.

    Unfortunately when you break the numbers down, the pay per artist is terribly low… Yes there are some artists spinning enough to pileup enough royalties to make a go of things, and Pandora are not doing anything illegal, albeit ethically questionable and obviously loop hole driven, but hey who isnt these days?? but those successful artists is not the norm, far from it…

    The sad thing is, i’ve never known the artist community to do anything but be very greedy and to steal a lot, so while i understand the sentiment, the reality is, it only matters what comes back into each artists pocket, as the community won’t be sharing with each-other, with is funny considering the artist is usually one of the biggest voices on world problems and class inequality and starving and revolution etc.. and of course sharing, arent artists so pro sharing??.

    I wish theyd stop with the comparison of broadcast radio and streaming, theres no apples to apples there, very different things, very very different, its all just PR based positioning and leveraging using number tomfoolery and trickery to justify and perpetuate their importance and to keep the flood gates open and put pressure on legislative and political Titanic’s, to make their business and investor meetings and their fancy year end review books with colorful graphs and stuff and pamphlets littered with pro Pandora propaganda, which is fine as thats what everyone does, its just a bit tired these days innit?? What matters is whats the exact dollar figure being transferred, line by line, per artist, day by day, thats the secret, and then, for those who actually get enough to make a living, what are all the very detailed steps and full disclosure on everything they do and every income stream they have, then perhaps we can start to figure out if it makes any sense or not…

    Ultimately what can be done about it? You have an industry controlled and gate kept by the Major Corporations, who also for whatever reason believe they actually own music, so anyone doing anything in music they immediately believe they own you and your property, which is a nightmare, you then have an illusory image based curtain protected industry that sells an unattainable dream to people along with confusing and often incorrect numbers and figures, thus making it even more appealing of a job/career, with technology cheap every last person can easily make and distribute music, thus the supply far outweighs the demand, the click through conversion rates of advertising are mediocre at best, and the other monies generated from data and information etc. are not having to be shared with those who make their business exist, so all in all, you have conditions ripe for extremely low pay per spin and even downloads…

    So while i go hard at them, theres not much that can be done in the immediate sense to get people more money, its all, and i mean all industries, are becoming a pennies game for anyone other then the rich…

    Why the music business is so middle manned and whittled to death, controlled and gate kept like few others, makes me a bit suspicious, its either to thwart money laundering, or else its just about taking advantage of creative types by uncreative jealous types, its hard to come up with any other logical conclusions…

    Forget making music, lets come together, build some better tech sites, share the huge ipo’s etc. among ourselves as most boards and top executives do, and then put our feet up and make music when we want how we want free from having to worry about fractions of a penny, but alas, that wont happen…

  5. FarePlay

    Well we read it. i thought it was going to be a joke……

    Besides, Paul’s got a new sprinter responding to every comment in her path.

  6. dave chappelle

    Then take your music off pandora. Oh wait, your label doesn’t want to? Why is that? It’s making them money?? Hmmm…

    • David

      You can’t take your music off Pandora. Shall I repeat that? You can’t take your music off Pandora. Neither can your record label, if you have one. Get it now? Pandora enjoys the benefit of legal provisions that give internet radio stations a compulsory licence to use music. In the phrase ‘compulsory licence’, what part of ‘compulsory’ don’t you understand?

      • Anonymous

        “You can’t take your music off Pandora”

        …which obviously makes it piracy. Legal, but piracy.

        Pandora is exactly like the Pirate Bay: Everybody would leave today if they could.

          • Anonymous

            Glad you brought that up!

            Radio was great back in the day, but it’s worthless now — paid exposure is available everywhere.

            You should be able to remove your property if radio doesn’t pay enough in your country. Otherwise, it has to be shut down.

          • Sarah

            Maybe that’s right.

            If terrestrial radio came into existence today, would you be okay with the way and terms under which they currently use music?

            Or do they get a “get out of jail free” card on the piracy issue just because it’s been around so long, it’s familiar, and there are laws and such legitimizing it?

          • Anonymous

            “If terrestrial radio came into existence today, would you be okay with the way and terms under which they currently use music?”

            That’s the question — and we all know the answer.

            Radio is a dinosaur, and it needs to adapt or die. (Take your pick, I honestly don’t care.)

          • Remi Swierczek

            Old fashioned Radio in USA, the dinosaur, without any Pandoras is BIGGER than global Music industry!
            ($18.5B US Radio in 2013 and $14B global music industry)

            That Radio and Pandoras can be effortlessly converted to old fashioned MUSIC STORE.
            The future belongs to Radio and streaming DJs feeding the best staff for monetization.

      • duh

        If you are the copyright owner you can remove your music from pandora.

  7. Anonymous

    Why the deceptive, totally inaccurate headline?

    Ah, yes, click bait.

    You might be proving Spotify and Youtube and Pandora’s point: “screw integrity, it’s all about the ad dollars and our bottom lines.”

  8. BeZ

    In the US alone the radio industry (AM/FM) generates $17B in revenues. Of this artists basically don’t get anything. Now imagine a future where Pandora (and other internet radio services) completely replace AM/FM radio and pay out 50% of all revenues (this will happen over the next 15-20 years as mobile & automotive connectivity continue to proliferate). That’s $8.5B that goes to rights holders. That’s more than all of the revenues in the current US music sales & streaming market (downloads + streaming subscriptions = $7B). If people in the music industry were rational they would be clamoring for Pandora and others to accelerate this shift to a paid radio model (you’ve just gone from something that was free to something that is paid). Additionally, if label execs weren’t imbeciles they would have never allowed a free tier in on-demand services like Spotify (something they seem to be trying to reverse with Beats which apparently won’t have a free tier).

    The main issue artists should have is how much of their hard earned $$ is being siphoned off by a bunch of unnecessary middle men – agents, managers, labels, promoters, publishers, etc. These people add limited value in today’s technology-driven world but essentially take 80-90% of what an artist deserves to get paid.

    The other issue that needs to be resolved, and this not on any individual streaming service to decide, is the split of compensation between performers and songwriters. The current split is not equitable and needs to be resolved so all parties receive proper compensation.

    • Sarah

      Thanks for highlighting that artists face TWO layers of problems:

      (1) the streaming services AND
      (2) the division of revenue between the artist(s) and all the various middlemen.

      I think the middlemen do provide value; for instance, having an agent handle businessy stuff leaves the artist with more time for her art. But I agree that technology necessitates a redefining of the roles and an adjustment of bargaining power between artists and “middlemen” generally; so far, this hasn’t happened in any meaningful way, but it’s possible.

      Because we’re treating professional artists as small businesses on RepX, we’re providing a lot of tools for artists to easily manage the business stuff so that they hopefully can start taking back control over their careers. We like delegating and using middlemen (it’s more efficient, if done properly) – but it should be a decision that the artist makes not because he thinks he has to use middlemen, but because he freely decides that he’s receiving value from them that justifies their cost.

      • BeZ

        To be fair I was trying to be a bit provocative saying that all middle men are unnecessary. The reality is though that there hasn’t been a redefining of roles among these middle men as you’ve noted. In a perfect world as artist would have one middle man that played the role of label, publisher, agent and manager. Today an artist pays 10% to agents, 50%+ to labels/publishers, 15% to managers. With technology you can envision a scenario where an artist doesn’t have a need for all of these people. Rather they could have one person take 25-30% of their earnings and play this combined role as opposed to giving away most of their earnings.

        • Sarah

          We’re totally on the same page here. 🙂
          That’s what we’re working on making a reality (although it might still be multiple people/companies, rather than just one person – that’s up to the artist, really). The important part is the shift in the balance of power between the artist and everyone else.

          • BeZ

            glad to see there are other rational people in the music industry 🙂

          • Anonymous

            We’re totally on the same page here. 🙂
            That’s what we’re working on making a reality (although it might still be multiple people/companies, rather than just one person – that’s up to the artist, really). The important part is the shift in the balance of power between the artist and everyone else.

            I do appreciate peoples desires and seeming wishes to have the power return to the artist, which is cool and all, but lets look at this another way…

            This whole artist thing though, artist, its the artist up to the artist oh the artist… Yes im once again belaboring the constant overuse and misuse of the term artist…

            Today an independent artist is like a Paul Volpe, eventually you will bother enough people and squeeze enough people, treading on others territories, that some boss will give you the leave, pay tributes, or else get wacked ultimatum…

            So a Paul Volpe does what he did to get mobbed up in the family, but is only a soldier and that made him no money and ultimately was no better a position to be in, so he started his own gang of hoodlums in an open city, and finally started to make some money… He again got somewhat booted and moved on to another flourishing city, raked a bunch from there, before the same thing happened, pay tribute, get out of town, or get wacked… Sounds a lot like the music industry, although i have reason to believe they are just wannabe gangsters, but who knows, dont really care, never the less…

            Music is the same thing hun, so you either leverage up to get with the muscle, the majors, or else you grind on the streets living hand to mouth, or else you get very very lucky, but overall most likely to get mired in obscurity as every business wants and needs to deal with the tonnage shippers, the movers and the shakers, the ones with the largest market shares, and those are the majors… theres no power to be had unless you are the one who owns a massive catalog of masters and has a ton of people under contract getting rights for various things…

            Sure arteests are influential to people who dont make music, but overall these days, anyone that has any platform and any publicity, they aint saying anything of importance, just gimmicks and antics, no real voices or resistance, nothing but plain old WWE Corporate entertainment for the peasantry…

            A single artist has zero power and zero muscle and zero options, they are a paul volpe among a very organized and family driven industry a la the mob…

            Im no Paul Volpe…

            The power artists need to accept, is that of control of their output, of their work, is in control of their distribution, in control of making the decisions, in control of not being tied down by contractual obligations, by the freedom to do what they want when they want, that is the power shift happening here, the money side of it and all that other stuff is just people looking to scale businesses to make their american dream come true, but strip every layer to the onion, and the power comes with compromises, not having and true muscle or leverage and most likely making little money, thats it in a nutshell, for the most part, i guess…

    • Paul Resnikoff

      I don’t think artists and rights owners should be clamoring for Pandora to expand, as you’ve mentioned. The reason is that Pandora is artist-hostile, and rights owner-hostile, as evidenced by their very aggressive efforts to lower royalties across all areas (recording, publishing, etc.) The larger and more powerful this company becomes, and the weaker the surrounding music industry and collective rights owners get, the lower royalties will be. Pandora is not looking out for the artist, as their track record clearly proves.

      Additionally, let’s ask ourselves why we are accepting this comparison Pandora has drawn to terrestrial, broadcast radio? This is just a special interest lobbying tactic: pick something horrible over there, and show how much of a great improvement you are over it. Spotify does it with piracy, Apple played a similar game with iTunes unbundling (comparing to Napster, Kazaa, BitTorrent, etc.)

      But does that make Pandora itself fair, just because it’s better than some horrible bad actor over there?

      • Anonymous

        You knowingly, falsely attribute a statement to Westergren in your title to stir up controversy, then you ask about what’s “fair” in the comment section? LOL that’s pretty funny. 🙂

      • BeZ

        As an economist I would have expected you to be rational. Piracy and terrestrial are not just lobby tactics (it’s so silly to even frame things that way)…these two unmonetized alternatives to music consumption are very present and very real. The industry has at least taken action to try to curb piracy and prevent the value of music from going to zero but has allowed terrestrial to continue to effectively pirate & broadcast music.

        Go back to your Stanford rational economist roots with me for a second…

        A. The Music Industry in the U.S. (circa 1999/2000)
        Recorded Music: $14B
        Terrestrial: $15B
        Total Market: $29B
        Amount Going to Rightsholders: ~$10B

        B. The Music Industry in the U.S. (Today – if labels hadn’t done anything about piracy)
        Recorded Music: $0B
        Terrestrial: $17B
        Total Market: $17B
        Amount going to Rightsholders: <$500M

        C. The Music Industry in the U.S. (Today – Actual / Reality)
        Recorded Music: $7B
        Terrestrial: $17B
        Total Market: $24B
        Amount going to Rightsholders: ~$5B

        D. The Music Industry in the U.S. (Today – if Terrestrial was monetized by Pandora and/or other internet radio players)
        Recorded Music: $7B
        Terrestrial: $17B
        Total Market: $24B
        Amount going to Rightsholders: ~$14B

        Please tell me how Alternative D is not the best option for everyone including rightsholders and why they shouldn't be clamoring for the industry to move to this model?

        Your whole point about Pandora being able to get lower and lower royalties is a matter resolved by direct negotiations where labels/artists/etc don't agree to take less than 50% of revenue. Pandora has proven that it can operate a viable business with paying 50% of its revenues out to rightsholders. Putting the right provisions in place (e.g., negotiating for 50% royalty) is a win-win-win for everyone.

      • Anonymous

        “Pandora is artist-hostile, and rights owner-hostile, as evidenced by their very aggressive efforts to lower royalties across all areas (recording, publishing, etc.

        […]

        Additionally, let’s ask ourselves why we are accepting this comparison Pandora has drawn to terrestrial, broadcast radio? This is just a special interest lobbying tactic: pick something horrible over there, and show how much of a great improvement you are over it. Spotify does it with piracy”

        Great comment, Paul.

      • Anonymous

        …or they could be comparing themselves to broadcast radio because both are passive listening experiences that are ad-funded and free to the consumer, and both fall under the public performance right according to copyright law? All of which makes broadcast radio a much more apt comparison than anything else?

  9. Josh

    BeZ, Bravo! There are very few readers on DMN who live in reality but the more that wake up should bring about some very positive change in the right direction. Step 1, direct their desire for change at the middle men, those who use propoganda and misdirection while they watch their own bottom line and keep a monopoly thriving.

  10. Jennifer

    Something not clear, I’m hoping someone can help me with this. I’ve heard comparisons of streaming and FM before. I understand one pays 2 types of royalties. However, when Tim says FM would pay $1300/spin, he means because that spin was performed to the entire listener base at one time. So what I don’t understand is why wouldn’t a Pandora artist also receive $1300 for the same amount of individual performances? Or is his point just that the money is generated in one shot where on Pandora your payment gets spread out over time and it “feels” like less?

    Does what I’m asking make sense? I’m sorry, just wanted to understand his point more clearly. Like if 1m people tuned in to an FM forced to pay Pandora rates, say they earn $1000/spin. But those same 1m listeners hearing the song on Pandora over a month also equal a payout of $1000, no? So why is he pointing it out then, what’s the point? Just the changed perception of a check in one day or check over the course of a month?

    • Radio Pro

      The main issue artists should have is how much of their hard earned $$ is being siphoned off by a bunch of unnecessary middle men – agents, managers, labels, promoters, publishers, etc. These people add limited value in today’s technology-driven world but essentially take 80-90% of what an artist deserves to get paid.

      Actually for many independent songwriters and performers the role of the middle man is essential. As a former music director for a mid-sized market I can attest that I only had time to talk to a handful of people per week. As that number grew during the deconstruction period, I became inundated with emails that I could not handle myself on top of the inexplicable rise in calls from people I had no interest in talking to nor enough time to spend defending why I did not add something.

      the RADIO vs STREAMING point is valid. I play one song to 100,000 people at one time on radio. The PERFORMERS get nothing .. and really, if a mid-size or smaller market, the songwriter actually makes nothing because playlists are extrapolated. I only have to report a portion of all playlists quarterly, not the full playlists daily as is demanded of digital formats. IMO the future of PERFORMER pay and increased songwriter pay comes from the internet in the future. We’re about 20 yrs from FM being an anachronism.

      • Jennifer

        Thank you. You may be perfect one to answer my question. What is the point Tim is really making with the $1300/spin comparison? If FM and Pandora paid the same royalties wouldn’t they both equal $1300? One being 1 spin to X people and the other being X spins to X people. So what is he pointing out exactly? That artists would be happier to receive the money faster off 1 spin? Or is he saying there’s no difference, just the perception that one way is better when they’re equal? I just don’t understand.

        • Anonymous

          Thank you. You may be perfect one to answer my question. What is the point Tim is really making with the $1300/spin comparison?

          Its PR spinning…

          He’s saying that an FM radio station might reach 500 000 people at the same time during one spin, so hes saying that when you reach 500 000 people on Pandora, meaning your song has been spun 500 000 times by people, you will make $1300, or whatever the figure is, whereas on FM Radio you’ll make an amount that can be hard to figure out but that which they conveniently suggest is zero, using different terms such as performer people often get confused with to help bolster their marketing campaign and ease business tensions from the artist backlash…

          • Anonymous

            If you’re a performer it is zero because there’s no performance right on terrestrial radio for the sound recording. There’s talk of changing that, but for now that’s how it is

            If you’re a songwriter you do get something through the PROs, but Im really not sure how that stacks up against Pandora’s songwriter royalties

    • max

      i think you’ve got it right. he’s saying that if radio had to pay the same royalty per single listener as pandora does, they’d be paying $1300 every time the station played the song. so his point is that a pandora play is worth more than a radio play, except for the fact that the pandora play is calculated one listener at a time.

    • Sarah

      Do you really think it’s “over”?
      What about the following:

      1. Some people still buy music from traditional online stores (or iTunes, Amazon, etc would have no sales at all; and I don’t know how eMusic is still in business but they are, so someone must be buying something;
      2. Some people choose to pay even when the music is definitely free (see Patreon);
      3. Some people choose to pay more than they have to (Bandcamp says 50% of purchasers do);
      4. There are developing, greater opportunities for artists to succeed with minimal “middlemen” (or with a stronger bargaining position), which means that in the future hopefully more of the money can go directly to the artists;
      5. Fans show a strong interest in experiences on top of just music, and experiences can’t be stolen – in fact, they can be quite pricey and people pay anyway. (see Bandpage)

      Don’t you think all of those individually show some promise for restrengthening the music industry in the future? These all present in very fragmented and even nascent ways right now, but I think they’re cause for hope. If we can harness what we already know into a comprehensive system that caters to consumers’ interests and values while putting more control in the artists’ hands, then I think we’re far from over.

      p.s. re point 4: I have nothing against those “middlemen.” It’s like doctors, really; it’s generally a good idea to spend your time doctoring and have a manager on board to manage the business stuff. Efficient division of labor and all that. But I think it’s good that by artists having more options for doing it themselves, they gain a little leverage and can be pickier about finding the really terrific middlemen.

      p.p.s. Glenn – I really like Traveling by Night. 🙂

      • Minneapolis Musician

        Sarah,

        First, I am glad that my song Traveling By Night gave you some enjoyment. That’s why I write and play ’em. 🙂

        Regarding your points about hope for the industry and artists. I have been following the digitalization of music for a decade now, waiting for all these good things to happen. And things have just gotten worse, financially speaking.

        It’s music supply and demand at work.

        There are SO MANY MILLIONS of artists offering their recordings today that there is no way even all the good ones can earn a living at it. Because there are probably half a million really excellent performers trying it now, and more arrive every year…and who has time to listen to all that good music repeatedly? Add to it all the “old” great stuff that has been digitized so people can listen to great music from decades past…there are albums upon albums I “missed” that I am now rediscovering.

        There is just SO much good music competing for attention.

        I advise any aspiring artist to have a day job/career first.

        And now, here is a link to my original tune Traveling by Night for those reading who might be wondering what you were talking about. 🙂

        http://www.reverbnation.com/glenngalen/song/2044976-traveling-by-night-twang-guitar

        — Glenn Galen

        It’s because recording equipment became cheap and the internet gave them all a distribution channel. Now there is so much “noise”.

        • Sarah

          Glenn,

          You’re right about the flood of new artists and content, and the effects on supply of music recording and distribution becoming so affordable. There’s no perfect solution to this, but one thing we’re doing is focusing on professional content. When you give someone everything in the world, good and bad and more than they could ever possibly even go through, the next thing they’re likely to want is filtering — a way to reduce that noise and pull out the “good stuff.” Otherwise the amount of content is overwhelming to the point of being unpleasant (the tyranny of choice psychology also applies).

          So we’re taking a different approach. Some sites let absolutely everything on, and that’s great in some ways. But we’re exclusively a platform for professional content. The song you spent weeks writing, perfecting, and professionally recording should not, by default, be on the same stage as a spontaneous Taylor Swift cover recorded with an iPhone.

          Sticking to professional content will help decrease noise, and hopefully create a more polished, higher quality overall experience for the audience. We’ll see how it goes 🙂

  11. Anonymous

    Until recently, radio would sell records and CD’s. It wasn’t so bad that artists didn’t get much money from radio airplay because it would spur people to go out and buy the physical product. That is not the case today with streaming – it’s replacing the physical product instead of selling it.

  12. Wooly

    It’s true. I just got a check from my Pandora spins and it totaled $78,400.

    • Anonymous

      incredible, well done old boy…

      how about sharing a .jpg of the cheque and all contractual obligations, who owns what and what part you get and how you got all those spins, just so we can be certain its a worthy venture to chase down, as that is a liveable yearly wage and as such would be a glorious bit of news for everyone to hold onto…

      much appreciated and thanks kindly…

    • Sarah

      That’s awesome! It’s great to hear that Pandora works for some people. 🙂 (Although, technically, the information you provided – the amount of your check – does not by itself support that anything is true except that you got a check for that amount).

      • Anonymous

        “It’s great to hear that Pandora works for some people”

        It doesn’t — if you make $78,400 from Pandora, you also make $10m from iTunes…

  13. Sarah

    Question for all

    Why don’t more people share royalty statements from Pandora, Spotify, YouTube, etc?

    Everyone suffers from the same problem: lack of information and transparency from these companies. The only way to combat it and acquire information that’s important to your career (and no, this is not a perfect hack) is for enough people to share enough verified information that a reasonably accurate picture can be pieced together.

    So why don’t more people share that information?
    Is it because you don’t have a good way to share it? Is it because you aren’t confident that you can share the information while remaining anonymous? Is it because you don’t see the point in sharing it, or you just don’t want to?

    If I had to pick, I’d think the anonymity issue is the biggest hurdle, at least for the artists and labels who care about these topics (e.g., you can submit “anonymously” to DMN, but that means DMN still has your email and identifying info so it isn’t truly anonymous).

    But that’s just my guess, which is why I’m asking: what do you think?

    • Anonymous

      Question for all

      Why don’t more people share royalty statements from Pandora, Spotify, YouTube, etc?

      Everyone suffers from the same problem: lack of information and transparency from these companies. The only way to combat it and acquire information that’s important to your career (and no, this is not a perfect hack) is for enough people to share enough verified information that a reasonably accurate picture can be pieced together.

      So why don’t more people share that information?
      Is it because you don’t have a good way to share it? Is it because you aren’t confident that you can share the information while remaining anonymous? Is it because you don’t see the point in sharing it, or you just don’t want to?

      If I had to pick, I’d think the anonymity issue is the biggest hurdle, at least for the artists and labels who care about these topics (e.g., you can submit “anonymously” to DMN, but that means DMN still has your email and identifying info so it isn’t truly anonymous).

      But that’s just my guess, which is why I’m asking: what do you think?

      Well PRO’s and others have confidentiality clauses and many people are under NDA’s with labels etc.

      Otherwise its all smoke and mirrors, its a huge fronting lying fake it till you make it industry, so a good amount of people claiming something will actually be making their money elsewhere or born rich or a nice slushy trust fund…

      It took some aggressive journalism to finally get sports athletes to disclose their wages, they wont ever want to do that in music beyond the vaguery of forbes and their top deity super star artists all knowing all seeing greats…

      Anonymous is a dark knight savior, because if everyone had to post their name and details with everything they did online, it would be like the public business world, where everyone lies and is fake and covers up and keeps secrets and hides behind limited liability companies etc., else they would be fired or outed or lose business or else labelled a terrorist or etc. etc… With anonymous posting the world can finally get a better idea of what people are truly thinking and believing, and i think its been an eye opening experience for everyone but more so for leaders and people in power and old money etc…

      • Anonymous

        “With anonymous posting the world can finally get a better idea”

        Not in this case — as state below, numbers are extremely individual which means you can’t share them anonymously.

      • Sarah

        This royalty information is generally seen by at least a few people, right?

        • Anonymous

          This royalty information is generally seen by at least a few people, right?

          For example Sarah, from a legitimate well respected Publisher who just sourced tens of milliions of dollars of funding for expansion i believe it was, i received two different types of statements for the same catalog over the same time period, supposedly supposed to be identical, one an overview the other a complete breakdown…

          They were different by double/half, one was double what the other one was, guess which one they paid out??

          If you said the one that is half of the other, the lesser amount, you are correct…

          Now i cant even payout who i need to because the numbers dont jive making figuring it out impossible to get right, so until i get further clarification on whats going on, itll just sit in my account, as does happen a lot all over the place in that business…

          Who knows what happened or who was at fault, but it raises suspicions, and ive yet to spend the time to dig through it so i cant place any blame or frustration upon them, but its messy like that so these things happen frequently, with so many different business deals and contracts and things going on and sooooooooo many line items of fractions of a penny, its tough, it would probably be a bad look for most people especially considering the illusory nature of it all…

          I may die waiting to hear back about something that is supposed to be a legitimate business with contractual obligations they are supposed to abide by, making it eventually either not worth my time or else something you have to elevate to a higher level and thusly send notices and suits and audits and all that, just to get the story so i can pay out who needs to be paid out, all for fractions of a penny…

          Ultimately its not worth it, total waste of peoples time and energy to waste going over miniscule fractions of pennies thousands and thousands of line items deep while they make $20/hour or whatever it is, something software/technology could do instantaneously, so just busy keep people busy work… it makes the tulip business look like they are buying and selling gold…

          id rather get a one off fee and release everything for free all rights reserved then mess around with the ridiculousness of it all…

          • Anonymous

            I mean it isn’t like she’s my girlfriend, mistress or wife, so she has no right to half my money, and if that’s her claim, then lets not forget the lying thieving greddy cheating whore of a bitch is still on the hook for my half of the millions she ripped me off for…

    • Anonymous

      “Why don’t more people share royalty statements from Pandora, Spotify, YouTube, etc?”

      Didn’t you go to law school? 🙂

      And no, you can’t share that kind of info anonymously — nothing is more identifable than numbers.

      You have to rely on a few naughty (and brilliant) people like Zöe Keating who just don’t give a shit about our Masters.

      • Sarah

        Yes, I did. Passed the bar and everything. One of the things that make lawyers seem so sleazy is that they know there’s usually a way to get around things (heck, look at what Spotify’s lawyers did to the labels with the pricing of the premium tier to meet their conversion rates). But there’s no reason that can’t be used for good, right?

        Okay, numbers are individual. So you’d need to be able to share them without there being any proof you shared them; the “publisher” would also need to alter the presentation (perhaps by using aggregated data) so that when published it’s impossible for anyone to say “Oh, those are Bob’s numbers for Song X!” And, of course, my other question was “does more than one person have access to Bob’s numbers for Song X”? Hypothetically.

        But this is all assuming that many artists want to share and/or receive this information. Do you think that’s a correct assumption?

        • Anonymous

          But this is all assuming that many artists want to share and/or receive this information. Do you think that’s a correct assumption?

          Of course they dont want to share…

          Theyd rather have people think what they want, as soon as the people have confirmation that most music people dont make a living from their music, their whole facade and image goes away and they are no longer successful music artists but rather something else…

          its silly, but too many peoples careers have been made and depend on the lie, and too many are chasing it down still by way of being a rich kid or trust funded, and theyd rather project that romantic starving artist image, for whatever reason…

        • Anonymous

          “But this is all assuming that many artists want to share and/or receive this information. Do you think that’s a correct assumption?”

          Everybody wants that kind of information, but nobody wants to share it.

          • Sarah

            I’m confused – are these from the same anonymous?

            Yes, you’re right, way more people want to receive than share. But as demonstrated by brilliant people like Zoe, and the folks who occasionally send stuff over here, some people are willing to share. It stands to reason that more would share if they trusted they could do it safely and easily, right?

            Plus, the aggregated data is more informative and useful, I suspect, than the individual data.

            So this is more a question of “how much do most artists really want to know what’s going on with these services?”

          • Anonymous

            “are these from the same anonymous?”

            Nope, ‘Anonymous’ is the default handle you’re assigned when you comment without logging in. In other words, we are many, but we come in peace. (I’m the real one though, do not accept copies. 🙂 )

            “Plus, the aggregated data is more informative and useful, I suspect, than the individual data.”

            Good point. But as you say, it all comes down to trust in the first place; trust and motivation.

          • Sarah

            Hmmmm….. considering ways to do this, and I think there are some. Obviously that trust factor is critical, so you’d want to set it up such that it was virtually guaranteed to be safe (e.g., you aren’t asking anyone to simply take you at your word). Just ideas for now, though. Thanks for your input 🙂

        • Anonymous

          Sarah, maybe you can clarify for me please. Because I’m still looking for some more explanation. If FM and Pandora had the same royalty requirements, 1 spin on FM playing to 1000 people, or 1000 spins on Pandora playing to 1000 people would equal the exact same payout, no? If they pay out exactly the same, what would be the purpose to point that out, the $1300/spin thing. What’s the difference? Someone above said he is trying to say payouts would be more on Pandora if FM paid the same royalty rate, but I don’t see how that would happen.

          What is he really trying to point out?

          As explained above…

          Its PR spinning…

          He’s saying that an FM radio station might reach 500 000 people at the same time during one spin, so hes saying that when you reach 500 000 people on Pandora, meaning your song has been spun 500 000 times by people, you will make $1300, or whatever the figure is, whereas on FM Radio you’ll make an amount that can be hard to figure out but that which they conveniently suggest is zero, using different terms such as performer people often get confused with to help bolster their marketing campaign and ease business tensions from the artist backlash…

        • Anonymous

          Yes, I did. Passed the bar and everything.

          Interesting…

          Wanna take on the Majors, some of their subsidiaries, some of their artists, producers and writers??

          You can be like the real life female version of Harvey Dent and ill be the opposite batman, not a playboy billionaire fighting crime, just a poor single lonely man fighting crimes against my person and property…

  14. Jennifer

    Sarah, maybe you can clarify for me please. Because I’m still looking for some more explanation. If FM and Pandora had the same royalty requirements, 1 spin on FM playing to 1000 people, or 1000 spins on Pandora playing to 1000 people would equal the exact same payout, no? If they pay out exactly the same, what would be the purpose to point that out, the $1300/spin thing. What’s the difference? Someone above said he is trying to say payouts would be more on Pandora if FM paid the same royalty rate, but I don’t see how that would happen.

    What is he really trying to point out?

    • Sarah

      Jennifer, hopefully I can be of some help (though licensing royalties are not my area of expertise).

      I’ve read your comments on this, and you raise various questions – some of which I’m not entirely clear on what you’re asking. So maybe let’s go back to the original quote:

      “if broadcast radio paid the same royalty that we were paying, it would be in the neighborhood of about $1,300 a spin, on broadcast radio.”

      We might be reading entirely too much into this rather awkward statement from Westergren, and missing the point.

      To paraphrase the conversation, as I understand it:

      Mossberg: Artists think your payouts aren’t fair. Tell me about your payouts.
      Westergren: Well, instead of that let’s talk about how we’re different from radio. Pandora pays out differently than radio – we actually pay more, though; if radio paid as much as we do, they’d be paying $1,300 per spin (instead of the lower amount they pay now).
      Mossberg: No, stop talking about radio, I want you to talk about Pandora’s payouts – what’s the actual royalty an artist gets each time his song is played on Pandora?
      Westergren: “It’s a fraction of a penny per play, per person.”
      Mossberg: Artists don’t think that’s fair. Are you open to raising the rates in response to artists’ concerns?
      Westergren: Not really, no. There are some laws in this area that mean we don’t have to.

      It seems to me that Westergren was simply trying to avoid giving that answer – “a fraction of a penny per play” – by responding with a dodge that basically said “hey, let’s not talk about our payouts, let’s talk about how we currently pay more than radio pays, so we’re obviously awesome.”

      But then, maybe I’m reading this incorrectly, so I’d love to hear alternate explanations of the conversation. As for music licensing expertise, I honestly don’t have much: we began researching music licensing when we first started RepX, learned how complicated the current licensing systems are, and said “wow, that’s a crazy way to do things – let’s definitely not do that.”

      With RepX, we decided to ditch this messy (and largely coercive) licensing scheme altogether; if a song is on our site, it’s because the artist (or rightsholder) put it there and set his own price for it. Sooo much easier, infinitely more respectful and fair to artists and their property rights, and virtually transparent by default. 🙂

      • Anonymous

        i don’t know, i wish you well, but will be tough without the majors catalogs…

        Also getting a nice royalty cheque is pretty fair and the best leveraging of property rights beyond large up front fees for master use…

        Again, if artists wanted to get treated real fair and leverage their property rights the best, they need muscle, so if they dont like or cant get with a major, then independents need to come together, sans a merlin etc. and collectively leverage their property, stats, fans under one umbrella…

        Else get nothing up front and little on the back end…

        There is no other way…

        Im no longer interested in such a thing, just sayin, thats what the artists will have to do, if they care, nothing else is going to work, otherwise theyll just be relying on someone else to help them, which never happens, and none of these tech sites are about anything other then making money off of others hard work, they only use the artist angle to try and capture that division of the marketplace and to put positive pr spins on their attempts to make their american dream happen…

        🙂

        • Sarah

          but will be tough without the majors catalogs…

          Yep, we’re doing it this way because we think it’s the right way to do it for everyone. It’s definitely NOT the easiest way. 🙂

          then independents need to come together, sans a merlin etc. and collectively leverage their property, stats, fans under one umbrella…

          Yes – sort of. Any meaningful solution is going to require the support and participation of the independents. That’s a necessary part. Honestly, some sites like Bandcamp and Patreon have already demonstrated that this can work; unfortunately, both of those sites are designed to be niche – to achieve the size necessary for this to have a lasting, positive effect on the industry, we need to still cater to the niche and super fans while simultaneously being appealing and appropriate for mainstream consumers.

          To be clear, btw, we’re not anti-major or anti-label; we simply dislike bad behavior, from anyone. We’d love to have them on our platform, provided they agree to play by the same rules as everyone else.

          put positive pr spins on their attempts to make their american dream happen…

          The “American dream” is an awesome one. But why should mine come at the expense of yours? (Trick question: it shouldn’t.) Sorry, I simply do not believe you have to screw people over in order to succeed. In fact, I believe that in order to truly succeed long term, you have to be doing something that makes things better for others. We have Spotify now because it’s the easy, short-term play … we’re working on the right, long-term play.

          In conclusion…. thank you for your well wishes, I really appreciate them 🙂

  15. Jennifer

    Thank you both for replying. I can word the question better now too. Because while he’s definitely terrible at dodging questions and its possible there’s not much to his thought other than some head fake, he’s definitely not saying what Anonymous explained. I’ll break it down like Sarah did.

    “If radio paid as much as we pay they’d be paying $1300/spin.” So first, he’s putting radio into the same licensing structure Pandora is in, meaning they pay mechanical and performance royalties per stream per listener.
    And if that means $1300/spin, it implies that its over 500,000 listeners listening to this make believe radio station (based on the average $.0023 plus performance royalties).

    Sure, and when your song gets played 500,000 times on Pandora you will receive exactly the same thing, since we’re now using the say royalty structure for FM and Pandora. (Like Anonymous said)

    OK, so my response is, “what’s your point?” Yes, if radio paid what Pandora did it would be $1300 per spin, instead of $1300 per 500,000 spins to 500,000 people. Now what are we supposed to react to this math? Is it a point that makes Pandora better for an artist? Doesn’t it just make FM and Pandora equally beneficial, at least from a financial standpoint.

    I just think he’s a little smarter than that, than to say something that really didn’t make a point. It threw me off.

  16. David lowery

    So westergren thinks 1 million people listen to a song every time it’s played on the radio? This guy is either incredibly stupid or a sociopath. On average over 20 years of radio play my songs reach an audience of about 3500 listeners a spin. And that’s based on wildly inflated arbitron numbers. I did the $ on that once and terrestrial radio on average paid about 29% more per spin. And that’s with terrestrial paying only songwriter. We are entering a new dark age of superstition.

  17. Me2

    “So there’s an arbitration process where this is handled. So there’s actually a hearing, dispassionate judges determine what it is, or it’s done through the direct negotiations. So there’s actually a mechanism for sorting it out.”

    Here’s the mechanism: Cut deals with the labels where up front advances, cash, and stock-options are exchanged for catalog rights at a low royalty rate and hidden under NDA .

    This low rate is then brought to the royalty board as an example of the “willing buyer/seller” market conveniently ignoring the aforementioned “compensation”. Indies get stuck with the low rate and nothing upfront.

    Race to the bottom.

  18. Al

    The problem with all streaming sites is that songwriters and publishers give them their songs for free, in the hopes that the songs will be played. Pandora does not play my music because I won’t ‘give’ it to them, until royalties are paid at a fair rate. Yes, it is in the hands of the courts and Congress now. I am confident the royalty issues will be corrected. Until then, Pandora will not be given my songs, I will not subscribe to Pandora, nor will I buy a Pandora-ready Honda.

    • Ken

      But Al, you’re saying you as a songwriter chose not to belong to ASCAP, BMI, or SESAC? Do you feel like you lose out on other benefits to joining their networks or would you recommend that same move to other artists who can still make the choice?

  19. Janet Minto

    Hey, Mr Westergren – news flash for ya…. There aren’t going to BE any more artists taking advantage of all the wonderful benefits Pandora provides pretty soon. You and your ilk have gutted their business and made it impossible to even call it a business, impossible to make any sort of living at all doing their art, while YOU are pocketing billions with your “platform” which has stolen music out of the hands of its creators. Thanks a pantload. What a hated man you are to become as this awful history is someday told to the next generations.

  20. puhleeze

    “$$ is being siphoned off by a bunch of unnecessary middle men – agents, managers, labels, promoters, publishers, etc. ” – Unecessary? Now that is truly hilarious. What planet are you living on where artists don’t need managers, labels, promoters, publishers and agents? Without any of these you will sell JACK SQUAT. How stupid are you exactly?