HomeMusic Industry NewsMergers and AcquisitionsPandora Has $450 Million to Buy a Ticketing Company, But Only $5,600 to Pay a Top Songwriter Paul Resnikoff October 8, 201536 36 Responses DJ Carl October 8, 2015 Musicians and songwriters must collaborate to educate 😉 Pandora pays too much October 9, 2015 And to take classes to learn about economics and business.For a wholesaler to criticize a retailer that is paying the wholesaler 70%+ of gross revenues for raw, unfinished goods, is crazy. Nobody in the real world would set up a business like that and have it succeed. You’d have to be crazy, or have non-economic reasons to want to work with the wholesaler.If you look objectively at Pandora, you will see they compete most directly with Radio, not YouTube, or Spotify, or the iTunes download store. Pandora pays hundreds of millions of dollars a year in music-related royalties, where Radio pays none. Pandora currently plays about 1/10th the amount of music as Radio. If Radio paid royalties at the same rate as Pandora for the existing music consumption, the industry–song writers, master recording rights owners and band members– would collectively be generating annual royalties of more than $5 billion.If you think it is too hard to lobby congress to get Radio to pay the same royalty rates as Pandora (again, resulting in an immediate $5b increase to “artists”), maybe it would make sense to work towards getting more listeners to stop listening to Radio and, instead, use Pandora, or Spotify, or any other non-interactive service. No disruption to the listener and $5b more for artists. Or you can just rant and whine from an uneducated position. Patrick October 12, 2015 You’re right, radio should pay more, along with Pandora and everyone else, so that an highly skilled person can earn a living wage or better. Excellent point. Pandora pays too much October 13, 2015 Every user should “pay more” is not the answer to this problem. Or, at least, it’s not the answer for the 98% of artists whose work is never heard at scale.It will never be possible to earn a living wage for some musicians because they make music that is not commercially viable. That’s reality. It sucks, but it’s that way for all artists, not just musicians. So, so stupid October 8, 2015 Seriously. I can’t even believe you claim to know ANYTHING about the music business.Anyone who has even perused this site knows that nothing close to actual, ethical journalism occurs here but, even this is beyond the pale.Point #1 – Pandora doesn’t pay Kevin Kadish. Pandora pays Soundexchange. NOT the artist. It is Soundexchange that pays Kevin Kadish and his record company.Point #2 – Simple math shows that Kevin Kadish is either not talking about sound recording performance royalties, lying, or shares a very, VERY large portion of his Soundexchange proceeds with someone else.Pandora’s lowest rate (that is, assuming every single of the 178,000,000 spins of “All About That Bass” went only to non-subscribers) is 0.0014 per spin. 178,000,000 x $0.0014 = $249,200.00.Wake up.Stop the bullsh|t. Please. Paul Resnikoff October 8, 2015 Kevin Kadish, as songwriter, would not be paid through SoundExchange. And he is certainly not talking about recording royalties. Bingo October 9, 2015 Yet another misleading headline with absolutely no substance or follow up Paul.#eyeroll Wildweezil October 9, 2015 Soundexchange pays royalties to the performing artist and the record label, NOT the songwriter. Songwriter performance royalties are paid by ASCAP, BMI, or SESAC in the US. Bingo October 9, 2015 Tell that to Paul. I know who pays who. Emanon October 9, 2015 No mention of SoundExchange until “So, so stupid” brought it up. SX has nothing to do with this. The headline mentions songwriting, not performance royalties. Bingo October 9, 2015 The headline “says” Pandora pays Kadish. That’s the erroneous and insidious beef here.ASCAP pays Kadish & Co., not Pandora. Pandora is paying the going ASCAP rate…just like everyone else. Paul is using Pandora as his personal whipping boy for page views. Uberchurl October 9, 2015 ‘Bingo’ for Bingo…hit the nail on the head. Another faux story filled with the stench of clickbait. Cheryl October 8, 2015 You have chosen the correct name for yourself.You, So so stupid, should take your own advice.Wake up and stop the bullshit. PleaseMusicians need to get paid for their work, and they aren’t. The Point Still Holds October 9, 2015 I think a major point still holds, doesn’t it?Pandora doesn’t pay the songwriter, they pay his PRO.It’s his PRO that paid him $5,679.00 for 178,000,000 spins. T Cooke October 8, 2015 I think Paul knows plenty about the music business, but he his a writer here and media outlet news source business leader that survives based on ad revenue, and other arrangements. I’m glad I don’t have his job of striking the best balance or taking a lot of public backlash and rejection. As an artist, I can appreciate his courage and perserverence through constant backlash and rejection. He has a heart. Name2 October 9, 2015 Hi, Paul’s Mom!! GGG October 9, 2015 I think the issue people have is we don’t need to see this same non-article for the 37th time. I just don’t get why he can’t explain the pipeline, for sake of clarity and, gasp!, actual analysis. Plenty of people on this site know how it works, but more probably have no idea.We get it, streaming payments suck. I see it first hand every statement. But it serves 0 purpose in solving the problem if the entire scope is not discussed. I know (at least I really, really hope) Paul knows Pandora isn’t cutting a check directly to this guy, or any songwriter for that matter, so why put these stupid headlines up every single time. It’s amateur. Bingo October 9, 2015 +1000 Ariel October 8, 2015 SERIOUS ANALYSIS ALERT Ariel again October 8, 2015 If Pandora is following that law, you don’t have a leg to stand on. A business isn’t going to pay more than it has to, period. The law, on the other hand, changes. The law right now does seem to particularly hit songwriters. It’s the government’s job to defend songwriter’s legitimate interests, unlike Pandora, who’s job it is to make money. Why not focus your angry energy there? Charles October 8, 2015 Ariel, Pandora and all the rest of the criminals are NOT following the law. They make it up as they go. That’s the whole point. There’s a thing called Copyight Law, and all of them have broken it. Focus our angry energy where? The US government? I’ve tried that by writing my three Senators and have gotten nowhere. They are more concerned about people in the Middle East than they are Americans. We have a Lying Sociopathic Criminal as the possible front runner of one party, chosen by the corporate elites that control you and I. Doesn’t that tell you how messed up this country is right now??5 Million X Zero is still Zero. Only in the music business can someone pay you under one cent, log it in as a payment and then pay you 0.00. Five million of those and you still have 0.00. And your rent keeps going up. Do you understand this? Every musician has the absolute right to complain about these asswipes. Google is designing a car – why don’t they pay the musicians whose music they have on their site? This is called lack of morals, dishonesty, corruption, greed and fraud. I grew up in a world where people were honest and followed the rules for the most part. All these corporate jerks own the government, they control them. Ariel October 9, 2015 Hey Charles,They are, of course, following the law, otherwise the lawsuit-happy music industry would be all over them, as they are other services.Pandora is a radio service and operates on a blanket license. They’re required to pay royalties determined by a special court. That’s what they pay. They don’t just make it up randomly. errr.... October 9, 2015 I would try writing that third senator again. I’ve had some success with the third senator from my state. GregG October 9, 2015 I think were missing a huge point here:All About that Bass- “One of the biggest songs of the past two years” = THE SAD STATE of the music business.If anyone was paid anything for that song, they were overpaid! If the person who wrote this is considered a top songwriter – WERE DONE Name2 October 9, 2015 Songwriters are a dime a dozen. OTOH, a good girl in the box-office is worth her weight in gold. Mac Daddy October 9, 2015 McDonalds has an ANNUAL average revenue of $27 billion yet pays most of its employees $7.50/hour. Songwriters can cry about Pandora, but don’t lose sight of the fact that inequality happens at all levels in all industries. Count your blessings you don’t have to flip burgers – or maybe you do Faza (TCM) October 9, 2015 Um, you do realize that $7.50/hour works out at around $15,000 per annum? Which is roughly 3 times the royalty amount being discussed. Flipping burgers beats songwriting any day, it seems. There is something... October 9, 2015 Oh please, everyone with a little understanding of music business can see that this amount is only a tiny part of what a songwriter makes ! You have to add all the mechanicals from CD / downloads sales. And on demand streaming royalties. And everything that has been made from live, TV, radio all over the world (because radio outside the US pay royalties). omg... October 9, 2015 Yeah…having a LITTLE understanding doesn’t really help. First: mechanicals are not what you get from sales, those are royalty payments. Second, the growing paradigm is that streaming is supplanting CD & download sales – which is more like gaining a nickle while losing a dollar (figuratively speaking) – so that “little part” of income is coming at the expense of another, more lucrative part. Third, songwriters don’t make anything from live performances, unless they’re the ones performing. TV and radio pay, according to scales that haven’t been updated in several decades – but streaming companies have bargained for their own special low rates – and more and more, as the web eats away at traditional broadcasts’ profits too (because all those tech billions are coming from other industries, the money isn’t magically appearing from thin air) they also want to pay less or, in the case of TV, nothing at all. There is something... October 9, 2015 First, mechanical is what songwriters get from sales. We are speaking about songwriters, if you didn’t notice. Second, Pandora is not on demand streaming, they compete with radio, not sales or iTunes and Spotify. Third, songwriters do get royalties from live in most civilized countries. It’s an issue with US PROs and laws. Jon B October 9, 2015 @ Pandora Pays too much: If you think that music that has been arranged, produced, mixed and mastered to be “raw unfinished tracks” your ignorance is breathtaking. Music is the product, the finished product, streaming is a service. Without the product there is no service, yet streaming companies, which are tech companies posing as music companies give their engineers great pay, benefits and perks while paying the people who make the actual product virtually nothing. bbz October 9, 2015 Paul – Totally irrelevant…learn the difference between a P&L and a balance sheet. John Drefahl October 13, 2015 it’s time for the industry and those within it to take a serious personal inventory of its businesses. Being that I hail from the independents and had a 2 year stint with the majors as manager of New Technology at BMG Entertainment from 2000-2002, and spent a confusing 3 months as an ITMS Content Ingestion Analyst and Technical Writer under contract at Apple. So I feel as though I can add my 2 cents to this.1st, it doesn’t take a campus of 2000 to run a music streaming service. I say this first and foremost because I know that the first thing the majors will cite the incredible amounts spent on overhead to justify the lack of paying artists a decent wage. Plus, they still want to pay artists what they did back in the physical medium days, and instead of take the gained revenue from the lack of physical distribution costs and spread the wealth. They will justify this money grab by stating that they have to recoup their losses from piracy.Back in 2010 I met with MOG before they were sold off. MOG was unique among the Streaming services. Instead of licensing only specific tracks, MOG would license entire catalogs. So no one can say that the sheer volume of content is justification for the cost of a high overhead when it comes to operating costs. MOG was based in a small office in Berkeley, and didn’t have a 50 person engineering team. I think its safe to say that the total number of people that Apple had employed for just ingesting content into iTunes, is what MOG had in total for their whole service!My point is, that the current leaders in the space, Apple, Google, and Spotify all are very bloated! Especially with in this day an age, most of the ingestion of content and the administration of said content can now be shifted to the content owner. Rights and duplicate track detection can be done with audio fingerprinting. Storage space, and transcoding is available to everyone in the cloud.A new company needs to come. A company dedicated to breaking the standard royalty and streaming pay structures.. It’s possible for a streaming service to be ran by 10-20 people, and there is no “Campus” needed. If this was done, then the payments to the artists could finally come to age.. to living wage levels.No thinking really needs to be done. You got a catalog, you have your streaming apps, and a registration/administration system. That’s pretty much all you need. The artists content should sell the service itself. No need for multi-million dollar campuses, or marketing campaigns for the streaming service. Now, if only someone with the cash would step forth to put down the 250k needed to build such a service.Being that I am just coming off a contract with the Walt Disney Family Museum.. I’m happy to lend a hand if someone can secure the investment needed to start development.Cheers John Rick Shaw October 14, 2015 What a stupid headline for a story. Good business dicatates that companies pay the actual value (based upon ROI) for things. The songwriter got over $5k that he didn’t have before. Shut up and go write more songs. Literati X October 14, 2015 Five thousand six hundred and seventy nine dollars could be the contract that was signed ? It’s rare for a song to get out the gate like that and amass that type of distribution/performance . Inside the digital music industry you can easily sign yourself into basically public domain. . .Pandora does due diligence ; they know well who to eXploit and not to fuck with. . . Mike Smale December 9, 2015 I use Spotify and other streaming services for my records. I make about a penny per stream on each of them, which is why the AFM going after them for unfair wages. Pandora, on the other hand, refuses to even play my music or any music represented by my agent and manager and they have urged all their clients to #BoycottPandora because they both feel that Pandora is using a modern, internet version of payola to get those with the big labels and big managers to pay them in exchange for showcasing their clients over smaller or independent labels instead.