5 ms·

I don't think the article discusses how royalties were paid for traditional radio, does it? Anyway, I've definitely discovered multiple bands through Pandora,

I don't think the article discusses how royalties were paid for traditional radio, does it? Anyway, I've definitely discovered multiple bands through Pandora, and then bought their albums/seen them in concert/etc.

adventured 13y ago
Traditional radio pays a much lower % of sales to the licensing companies. Pandora and Spotify are being fleeced by comparison. With the shift to Internet / satellite, the licensing companies made a huge land grab on the fees. The radio business has a few large organizations that go to bat for the whole industry. They're old lobbying groups with quite a bit of leverage, having been entrenched in DC for decades, and it's one of the reasons licensing fees have remained reasonable for radio. Internet radio / streaming has no such lobbying groups (yet).
- k-mcgrady 13y ago
  Spotify cannot be compared with traditional radio. Of course they are going to have to pay more. Spotify is essentially giving you access to an entire record store for free. On radio you get a limited number of select songs, you don't really get to choose what's played and the songs played get a lot more exposure which I'm sure is used to justify the lower fees.
  - adventured 13y ago
    Spotify, Pandora, Sirius, and all the rest can easily be compared to traditional radio. In the streaming market you have very few good choices, the market is serviced by a few massive companies providing a very wide selection of music. In the radio market that same concept is accomplished by over 6,000 commercial FM radio stations, with a diverse playlist. To get a different playlist, you change stations. Indeed every type of music is covered by those 6,000 stations. And of course it used to be even more diverse, in the days of the purely live DJ, before the radio business began to fade and broadcasters cut expenses by moving to networked systems like the former Westwood One. You also used to be able to call up just about any station and make a song request. I'm sure you won't like that comparison to picking a song digitally, but it's the same, and it was very archaic, but no different than some of the other technological leaps we've made in which old technology seems very embarrassingly primitive. You often had to use a phone to make those requests, and a phone was a marvel in its day. The technological difference can be compared, in regards to distribution, ease of access, etc. In that case, Spotify / Pandora win, that's obvious. It's not that you couldn't access every type of music via radio stations, it's that it was a lot less practical. Technology leaped forward and vastly improved the situation. Spotify is very easy to compare against the radio business. What they've done is consolidate the radio market down into one platform. The Internet ate the broadcaster, very simply, just like it ate old Ma Bell. I can also compare IP telephony against the old telephony system.
    - shardling 13y ago
      I kind of disagree -- people I know use spotify in a fundamentally different way than they used radio in the past. They often put on a particular album or artist, and this interaction is much closer to how folk used a library of CDs in the past. No one used the radio that way, even if you could call up and request a particular song. In contrast, Pandora is much closer to radio in how people approach it. (You can use Spotify like that too, but at least among my friends its not the primary means of interaction.)
- onemorepassword 13y ago
  To be fair, radio doesn't completely replace sales of singles and albums the way Pandora and Spotify do. You can't compare on-demand services to radio.
  - shardling 13y ago
    Pandora does not replace such sales. You cannot queue up an album or particular song to listen to. It's cultural role is very analogous to traditional radio. Spotify is very different, of course, and that's why they have a different royalty structure.
  - adventured 13y ago
    I wasn't comparing them, I was responding to the OP. I own radio stations and I have insight into the fees paid by radio stations for licensing. And of course I can compare them.
revelation 13y ago
Some (popular) radio stations are paid to play songs. Someone must have realized that exposure is value gained, not lost..
- atechnerd 13y ago
  Yes exactly. 5,000 plays on Spotify or Pandora is not equal to a single play on terrestrial radio. A single play on terrestrial radio probably reaches closer to 10,000 listeners, depending on how large the market is. In other words, 5,000 plays on Spotify is less than a single play on terrestrial radio.

adventured 13y ago

Traditional radio pays a much lower % of sales to the licensing companies. Pandora and Spotify are being fleeced by comparison. With the shift to Internet / satellite, the licensing companies made a huge land grab on the fees. The radio business has a few large organizations that go to bat for the whole industry. They're old lobbying groups with quite a bit of leverage, having been entrenched in DC for decades, and it's one of the reasons licensing fees have remained reasonable for radio. Internet radio / streaming has no such lobbying groups (yet).

k-mcgrady 13y ago
Spotify cannot be compared with traditional radio. Of course they are going to have to pay more. Spotify is essentially giving you access to an entire record store for free. On radio you get a limited number of select songs, you don't really get to choose what's played and the songs played get a lot more exposure which I'm sure is used to justify the lower fees.
- adventured 13y ago
  Spotify, Pandora, Sirius, and all the rest can easily be compared to traditional radio. In the streaming market you have very few good choices, the market is serviced by a few massive companies providing a very wide selection of music. In the radio market that same concept is accomplished by over 6,000 commercial FM radio stations, with a diverse playlist. To get a different playlist, you change stations. Indeed every type of music is covered by those 6,000 stations. And of course it used to be even more diverse, in the days of the purely live DJ, before the radio business began to fade and broadcasters cut expenses by moving to networked systems like the former Westwood One. You also used to be able to call up just about any station and make a song request. I'm sure you won't like that comparison to picking a song digitally, but it's the same, and it was very archaic, but no different than some of the other technological leaps we've made in which old technology seems very embarrassingly primitive. You often had to use a phone to make those requests, and a phone was a marvel in its day. The technological difference can be compared, in regards to distribution, ease of access, etc. In that case, Spotify / Pandora win, that's obvious. It's not that you couldn't access every type of music via radio stations, it's that it was a lot less practical. Technology leaped forward and vastly improved the situation. Spotify is very easy to compare against the radio business. What they've done is consolidate the radio market down into one platform. The Internet ate the broadcaster, very simply, just like it ate old Ma Bell. I can also compare IP telephony against the old telephony system.
  - shardling 13y ago
    I kind of disagree -- people I know use spotify in a fundamentally different way than they used radio in the past. They often put on a particular album or artist, and this interaction is much closer to how folk used a library of CDs in the past. No one used the radio that way, even if you could call up and request a particular song. In contrast, Pandora is much closer to radio in how people approach it. (You can use Spotify like that too, but at least among my friends its not the primary means of interaction.)
onemorepassword 13y ago
To be fair, radio doesn't completely replace sales of singles and albums the way Pandora and Spotify do. You can't compare on-demand services to radio.
- shardling 13y ago
  Pandora does not replace such sales. You cannot queue up an album or particular song to listen to. It's cultural role is very analogous to traditional radio. Spotify is very different, of course, and that's why they have a different royalty structure.
- adventured 13y ago
  I wasn't comparing them, I was responding to the OP. I own radio stations and I have insight into the fees paid by radio stations for licensing. And of course I can compare them.

revelation 13y ago

Some (popular) radio stations are paid to play songs. Someone must have realized that exposure is value gained, not lost..

atechnerd 13y ago
Yes exactly. 5,000 plays on Spotify or Pandora is not equal to a single play on terrestrial radio. A single play on terrestrial radio probably reaches closer to 10,000 listeners, depending on how large the market is. In other words, 5,000 plays on Spotify is less than a single play on terrestrial radio.