Pandora CEO Explains Why Free Music Is Killing the Industry

…from a recent op-ed by Pandora CEO Brian McAndrews on Business Insider:

“Internet radio is sampling and discovery; on-demand is the modern equivalent of ownership.  Only that’s where the analogy breaks down. Because today it is far too easy for on-demand consumers to continually “own” music for free.  Not just a free trial, but free all the time.”

“…the value of music will continue to spiral downward.”

“Years ago, if anyone could have walked into a record store, legally taken every record home for free, and listened to the exact songs they wanted for as long as they chose, the music industry model would have completely broken down. But that is exactly the situation the music industry faces today.”

  • Save

This gray market is unsustainable. If consumers can legally listen to free on-demand music permanently without converting to paying models, the value of music will continue to spiral downward to the benefit of no one.”

“This problem is imminently fixable: limit free on-demand music to truly trial. Countless other industries successfully convert their consumers from limited-time trials to payments.  Ad-supported radio models will continue to lead to exposure and discovery, on-demand services will convert a sizable subset of those listeners to subscribers, and we can all work together to banish the gray market experiment of recorded music.”

The full interview here.


Image by joiseyshowaa, licensed under Creative Commons Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0).

8 Responses

  1. Name2

    Is Brian confused by the difference between “forever” and “as long as you keep paying rent”????

    If so, does he own any residential buildings in the City? Sounds like my kind of landlord.

  2. Tickled Pink

    I’d like to see Pandora CEO Brian McAndrews and Kobalt founder and CEO Willard Ahdritz go toe-to-toe in a public debate as to the real reasons “…the value of music will continue to spiral downward”, but it might not be a fair debate in that Pandora CEO Brian McAndrews has a bit of an advantage when it comes to the downward spiral game as evidenced by the Pandora’s recent stock performances, just saying!!!

  3. Alan

    So a free service. That pays way less than Spotify per stream is complaining about free music?


  4. Not an idiot

    You people really don’t understand the differences between radio and in-demand, and it’s almost 2016. Please stop parroting the multinational CEO rights hoarders for a second and look at the reality.

    1. Pandora (current version) plays 80 percent more music than terrestrial radio.

    2. Pandora pays performers and labels; terrestrial does not.

    3. SoundExchange has paid out more than 4bn to date. A considerable chunk of that comes from Pandora.

    4. This massively expanded the existing performance opportunity for songwriters who do get paid for terrestrial plays.

    5. Pandora is lean-back (current version). It is not substitutional any more than radio is. There is a larger market of passerby listeners than active purchasers. This has always been the case. Most folks in the old days listened to radio and it was good enough until peer pressure meant they had I purchase the Grease soundtrack, Framprom Comes Alive or Rumours. The difference is, now this audience is monetized.

    We want the rates to go up. But when the arguments are this dumb, it works against that.

  5. Ash

    Spotify, on mobile, its biggest use-case, is also non-interactive. But no one ever mentions that.

  6. Rick Shaw

    Let’s get painfully honest here. The real thing killing the music industry is poor product.

    • Desty Toot

      Poor musicians. Poor writers. 4 or 8 bars repeated. Fatigue by the 2nd time if not the 1st. Song gets a second part, if lucky. Retro fetishes, while not even scratching musical surfaces. Simulacra. Vocal affectation, the purpose of which no one even remembers. A single point is worth one thousand instagrams.