9 ms·

Pink Floyd: Pandora's Internet radio royalty ripoff

68 points by scholia 13y ago

tptacek 13y ago
David Lowery made this point in a much more compelling and complete way: https://news.ycombinator.com/item?id=3850935 https://news.ycombinator.com/item?id=3850935 Of course, ultimately, people are (rationally) compelled by the own immediate interests. That's what allows people to deride musicians for trying to "cling to obsolete business models", as if a verdict on the viability of someone's business model entitled people to ignore their rights. So I don't expect Roger Waters and David Gilmour to have much more luck pressing this argument than any other musician has had.
- ChuckMcM 13y ago
  I really like that link, it captures a lot of stuff that is broken. It also raises more questions.
- mjn 13y ago
  That's a very interesting article that I didn't see the first time around. Thanks for linking! Some of the discussion is interesting as well. The point about the tech industry being ruthless at extracting surplus value, and that not always producing socially beneficial outcomes, seems correct.
- Justsignedup 13y ago
  However, note the context here: You are reading about the thoughts of a musician long past their prime. They have created vast wealth at one point in time, and now they only have the records to really keep them going. Vast availability of music DOES NOT MAKE MONEY FOR ARTISTS unless the labels are 100% cut out. Even then the numbers are small. They won't make minimum wage. HOWEVER... vast availability of music WILL increase their concert attendance. Which means -- $ for the musicians. This is why old timer musicians from an age where record sales were the way to make $$ will be against the new order of things. Pink floyd is not currently in the business of selling out madison square garden every night of their visit to new york. NOW I do not necessarily know which way is the better way. In fact I prefer freely available music online and concerts. However I am not in a position to make the call :P
  - tptacek 13y ago
    Pink Floyd makes galactic sums of money from concert appearances. The average Merge Records artist does not. Lowery addresses this in his post.
  - dylangs1030 13y ago
    tl;dr - Pink Floyd was in that business, actually, when it was still an active band. Pink Floyd used to routinely sell out everywhere - they almost define the term "progressive rock". It's not fair to say they're not in the business of selling out Madison Square Garden - they're not technically in business at all anymore. They still earn royalties but David Gilmour is his own act now.
  - gadders 13y ago
    New musicians have to sign "360" agreements with record companies, which means the record company gets a share of merchandising, concert receipts etc.
ChuckMcM 13y ago
I don't think Pink Floyd has much to worry about: NYSE:P Q2 (Apr '13) 2013 Net profit margin -22.78% -8.93% Operating margin -22.67% -8.83% EBITD margin - -7.16% Return on average assets -53.46% -19.23% Return on average equity -127.11% -37.49% Employees 740 Their royalty checks will stop shortly after Pandora ceases operations :-)
- samspenc 13y ago
  Took me a while to realize that this was for Pandora...
- ngoel36 13y ago
  You almost had me thinking Pink Floyd was a public company..
- forrestthewoods 13y ago
  Streaming services like Pandora and Spotify are simultaneously destroying the existing industry, not paying artists, losing money hand over fist, and tricking consumers into thinking they are actually supporting content creators. It's lose/lose/lose and the worst scenario across the board. I thing Spotify is far, far worse than piracy because with piracy at least people know the artists aren't making in money. People somehow believe that listening to a couple of brief ads per hour, or paying a whopping $10 a month, is enough to receive unlimited access to all music ever created. What a disaster.
  - bborud 13y ago
    I think this was inevitable the minute we had the combination of sufficient bandwidth and decent quality audio compression. From there on it was a perfect storm of the music industry not understanding what was about to happen, the manufacturers of players not getting it right and everyone being greedy and trying to make off with the whole cake. Fast forward one generation of kids who are now grown-ups and you have an entire generation of music listeners who will not pay ... whatever CDs used to cost where you live. The toothpaste is not going back in the tube. The time when David Gilmour could make living sitting on his fat arse is over. He will just have to accept that, and the sooner he realizes that the good old days are not coming back, the sooner he can do something productive. Like cultivate new ways to raise revenue.
MichaelGG 13y ago
Further cementing my opinion that you should never find out about people you really like (authors, musicians, etc.) as you're bound to be disappointed. Pink Floyd may have a point. But by conflating profit and revenue they lose credibility in their arguments. Why resort to lame rhetoric? Pandora can be growing as a business and still losing money. The fact they had an IPO and got more users doesn't change the fact that they are (as of last quarter) still losing plenty of money.
- k-mcgrady 13y ago
  I think their point was that that's not the musicians fault. If you want to make a business distributing a product you need to find a way to pay for that product and then sell it at a higher price. You don't start the business and then try to force a pay cut on the producer just so you can make a profit easier. Pandora should focus on getting consumers to pay more (higher subscriptions, more effective advertising which they can charge more for etc.). Edit: It's obvious that the music industry has business model problems but in this case it's Pandora that has the business model problem. The industry doesn't need to lower it's prices - Pandora needs to figure out a way to pay them as they need the music more than the music industry needs them.
  - themckman 13y ago
    It's kind of interesting that if the supplier of the good pandora was pushing was anything but an artist or musician, we'd be totally on their side for trying to get a fair price the goods they're providing. However, since the supplier is an artist or musician, they're the bad guys for wanting a fair price for what they produce.
  - MichaelGG 13y ago
    Exactly. Their point should be that Pandora's business model is a losing one, that there's no apparent way for them to be profitable, so they need to charge more and let the market sort itself out. But I guess that takes the fuss away from their complaint. If you view it as Pandora's just losing money and likely to not survive then it makes people wonder why you're complaining in the first place.
jaryd 13y ago
Not really relevant to the current topic of Pandora's relationship to music, but for those interested in the historical problem with music (and the music industry), I strongly recommend reading "The Problem With Music" by Steve Albini (From The Baffler, No. 5, 1993)[1]. This was my first introduction to The Baffler, and led me to start reading their publications regularly. I don't always agree with the author's point of view, but almost always find the content stimulating. [1]: http://www.petdance.com/actionpark/albini/the-problem-with-music.html http://www.petdance.com/actionpark/albini/the-problem-with-m...
- anigbrowl 13y ago
  That's 20 years out of date, though. I am tired of hearing free music advocates basing their arguments on how bad things were in the music industry a generation ago.
salimmadjd 13y ago
OT: Give credit to Pandora to provide the fodder for Roger Waters, David Gilmour and Nick Mason to finally agree on something :)
- RexRollman 13y ago
  LOL, I was just thinking the same thing. Considering what broke them up, it wouldn't be surprising if Waters composed the whole thing.
  - sinnerswing 13y ago
    "Welcome Pandora, welcome to the machine. What did you dream? It's alright we told you what to dream. So welcome to the machine."
    - SimHacker 13y ago
      "It came as a heavy blow, but we sorted the matter out."
Glyptodon 13y ago
I'll start believing in royalties when I start thinking it makes sense to pay an engineer for every car that crosses a bridge he designed for his life + 20 years or to pay the architect 10 cents every time I open my front door. Pink Floyd can sob 'till the cows come home, but it's not going to make me believe that <del>he's</del> they're entitled to money for something <del>he's</del> they've already done.
- mrleinad 13y ago
  Pink Floyd is the big guy trying to stand out for the little ones who get trampled on every day, and have no voice whatsoever. I doubt David could care less about those royalties. He has his own band and already has made a lot of money from PF.
- chasing 13y ago
  "Pink Floyd" is a band, not a person. Your first sentence betrays a similar lack of understanding about how royalties work. And bridge-building. And doors.
  - tomn 13y ago
    "The band is just fantastic, that is really what I think. Oh by the way, which one's Pink?"
    - arbitrage 13y ago
      You must be lost; this isn't reddit. Do you have anything to actually contribute to the conversation, or did you just want to make sure everyone knows you heard a Pink Floyd song once?
      - qu4z-2 13y ago
        While I agree the comment didn't add much, I think your reply was perhaps also a touch rude. Then again, my comment isn't adding much either. And to tomn's credit, the lyric is a bit more relevant than just some random line: The root poster thought Pink Floyd was a person not a band. Apparently that's a common enough misapprehension that they mentioned it in a song... thence the quoted lyric.
DannoHung 13y ago
It's a pretty touch choice for artists, I bet: Make nothing or make next to nothing. The old days aren't coming back. Your unloyal customers will steal your product if you don't sell it cheaply enough for their liking. Subsequently, you either have the choice of trying to make money on your loyal customers only or changing your product. You could try stopping your unloyal customers from stealing from you from some means, but that has not been an avenue that has a high return since it tends to also involve treating your loyal customers like unloyal customers.
- rdouble 13y ago
  Except artists make more now than they ever have...
  - lawnchair_larry 13y ago
    Could not be more wrong
- bcoates 13y ago
  > Your unloyal customers will steal your product if you don't sell it cheaply enough for their liking Like all those thieving bastards listening to AM/FM broadcast radio, which pays no royalties to performers? Home radio is killing music!
bborud 13y ago
I would have liked to see more numbers. How much does Pandora charge? How much do they pay in royalties? How much do artists make from radio royalties? How much did artists make in royalties from CD sales? How much have CD sales declined for Pink Floyd?
abalone 13y ago
Short on facts. What's this "85% pay cut" line they keep repeating? Unsupported and smacks of sensationalism. This thread has a much better discussion of the actual numbers. https://news.ycombinator.com/item?id=5935183 https://news.ycombinator.com/item?id=5935183 In short, Pandora is small right now and that's why the payout seems small. But by paying per-listener as opposed to per-broadcast, it has the potential to scale to higher payouts than traditional radio.
- k-mcgrady 13y ago
  >> "Short on facts. What's this "85% pay cut" line they keep repeating? Unsupported and smacks of sensationalism." You can find the info on where the 85% comes from in this story[1] but the important paragraph is below. "Pandora CEO Joe Kennedy appeared at a hearing on Capitol Hill in support of the Internet Radio Fairness Act, or IFRA, which would lower the amount of royalties that Pandora and other Internet radio services pay to artists. The industry has estimated the act would allow Pandora to reduce payments to artists by as much as 85 percent." [1]http://www.huffingtonpost.com/2012/12/04/pandora-artist-royalties_n_2239458.html http://www.huffingtonpost.com/2012/12/04/pandora-artist-roya...
  - abalone 13y ago
    ...which has zero facts in support.
- anigbrowl 13y ago
  But the problem in the other thread is the assumption that a radio listener and a Pandora listener are the same. They're clearly not, because if Pandora streamed the same thing to every listener it wouldn't have any customers. People pay Pandora for music customized to their personal taste. From the musician's point of view, that makes it less effective than radio at reaching new listeners.
  - dragonwriter 13y ago
    > People pay Pandora for music customized to their personal taste. From the musician's point of view, that makes it less effective than radio at reaching new listeners. More effective, I'd argue; sure, its likely that a smaller percentage of the Pandora listeners are new listeners, but the targeting of Pandora stations is more focussed better than radio so a larger percentage of the Pandora listeners that are new listeners are likely to become fans.
noonespecial 13y ago
Two things to always remember about this debate. 1) Pandora's biggest cost by ridiculously far is royalty payments. 2) Pandora is not now and has never been profitable. Lots of stuff is broken to make this so, but it's not a case of big bad "piratey" Pandora ripping off poor defenseless artists and laughing all the way to the bank.
- wicknicks 13y ago
  Just to add to what noonespecial says: 1. Royalty rates increase every 3-4 years. This is one of the big reasons why companies like Netflix have a hard time retaining contracts with content owners. 2. There are many middlemen involved in the online music/movie business. By the time everyone gets a cut, there is not much left in pool. This also ensures that everyone gets a very tiny portion. The online media industry is a complicated mess, and I don't see any long-term solution to it coming up soon.
- genwin 13y ago
  It's easy to not be profitable, though. Just pay large-enough salaries or invest in future growth what otherwise would've been profit.
  - noonespecial 13y ago
    In 2011, Pandora paid over 50% of revenues in performance royalties. 50%. Of Revenues.
    - genwin 13y ago
      That's a much more telling stat.
      - embolism 13y ago
        Not really - it just means they aren't very efficient at monetizing music. Why should artists subsidize a channel that devalues their art?
driverdan 13y ago
The government has no business getting involved with this one way or the other. It's up to businesses to negotiate. If rights holders aren't happy with the money they're making they shouldn't sign the contract. If the bands aren't the rights holders then they really have no say. That's a whole other can of worms. My personal anecdote is that bands are making far more money from me than they did before. I'm discovering bands I wouldn't have know about otherwise. That's the catch 22. The big, well known bands will always make money whether it be through sales or streaming. The smaller bands are much easier to discover through streaming but may not make much money through it.
pavanky 13y ago
Relevant discussion on reddit: http://www.reddit.com/r/Music/comments/1gyylv/my_song_got_played_on_pandora_1_million_times_and/ http://www.reddit.com/r/Music/comments/1gyylv/my_song_got_pl... The artists don't seem to understand that Pandora simply doesn't have the scope or reach of their other revenue sources.
- anigbrowl 13y ago
  150m users is about half the population of the US. How big of a market does Pandora need before it offers decent terms to its suppliers?
  - pavanky 13y ago
    But the users are listening to their own songs.
jejones3141 13y ago
Messrs. Gilmour, Waters, and Mason say "Artists would gladly work with Pandora to end AM/FM's radio exemption from paying any musician royalties – a loophole that hurts artists and digital radio alike", but if there's any evidence of their having done so, I've not heard of it.
digz 13y ago
Since Roger Waters revealed himself to be an anti-semite, I can no longer take anything he says seriously.
nextw33k 13y ago
What we are seeing here is an argument about value for money. The consumers are not willing to pay more for the end produce so what is left is the creators and distributors arguing over their share. The truth is that music is not a valuable commodity because so many people can produce good music. Being a musician is a blue-collar job, a technician (for the moment) is a white collar job.
scholia 13y ago
As Dave Birch pointed out on Twitter: "Dark Side of the Moon, used to illustrate, came out in 1973 - it should be in the public domain now" https://twitter.com/dgwbirch/status/349281727153319937 https://twitter.com/dgwbirch/status/349281727153319937

68 points by scholia 13y ago

David Lowery made this point in a much more compelling and complete way: https://news.ycombinator.com/item?id=3850935 https://news.ycombinator.com/item?id=3850935 Of course, ultimately, people are (rationally) compelled by the own immediate interests. That's what allows people to deride musicians for trying to "cling to obsolete business models", as if a verdict on the viability of someone's business model entitled people to ignore their rights. So I don't expect Roger Waters and David Gilmour to have much more luck pressing this argument than any other musician has had.

ChuckMcM 13y ago
I really like that link, it captures a lot of stuff that is broken. It also raises more questions.
mjn 13y ago
That's a very interesting article that I didn't see the first time around. Thanks for linking! Some of the discussion is interesting as well. The point about the tech industry being ruthless at extracting surplus value, and that not always producing socially beneficial outcomes, seems correct.
Justsignedup 13y ago
However, note the context here: You are reading about the thoughts of a musician long past their prime. They have created vast wealth at one point in time, and now they only have the records to really keep them going. Vast availability of music DOES NOT MAKE MONEY FOR ARTISTS unless the labels are 100% cut out. Even then the numbers are small. They won't make minimum wage. HOWEVER... vast availability of music WILL increase their concert attendance. Which means -- $ for the musicians. This is why old timer musicians from an age where record sales were the way to make $$ will be against the new order of things. Pink floyd is not currently in the business of selling out madison square garden every night of their visit to new york. NOW I do not necessarily know which way is the better way. In fact I prefer freely available music online and concerts. However I am not in a position to make the call :P
- tptacek 13y ago
  Pink Floyd makes galactic sums of money from concert appearances. The average Merge Records artist does not. Lowery addresses this in his post.
- dylangs1030 13y ago
  tl;dr - Pink Floyd was in that business, actually, when it was still an active band. Pink Floyd used to routinely sell out everywhere - they almost define the term "progressive rock". It's not fair to say they're not in the business of selling out Madison Square Garden - they're not technically in business at all anymore. They still earn royalties but David Gilmour is his own act now.
- gadders 13y ago
  New musicians have to sign "360" agreements with record companies, which means the record company gets a share of merchandising, concert receipts etc.

ChuckMcM 13y ago

I don't think Pink Floyd has much to worry about: NYSE:P Q2 (Apr '13) 2013 Net profit margin -22.78% -8.93% Operating margin -22.67% -8.83% EBITD margin - -7.16% Return on average assets -53.46% -19.23% Return on average equity -127.11% -37.49% Employees 740 Their royalty checks will stop shortly after Pandora ceases operations :-)

samspenc 13y ago
Took me a while to realize that this was for Pandora...
ngoel36 13y ago
You almost had me thinking Pink Floyd was a public company..
forrestthewoods 13y ago
Streaming services like Pandora and Spotify are simultaneously destroying the existing industry, not paying artists, losing money hand over fist, and tricking consumers into thinking they are actually supporting content creators. It's lose/lose/lose and the worst scenario across the board. I thing Spotify is far, far worse than piracy because with piracy at least people know the artists aren't making in money. People somehow believe that listening to a couple of brief ads per hour, or paying a whopping $10 a month, is enough to receive unlimited access to all music ever created. What a disaster.
- bborud 13y ago
  I think this was inevitable the minute we had the combination of sufficient bandwidth and decent quality audio compression. From there on it was a perfect storm of the music industry not understanding what was about to happen, the manufacturers of players not getting it right and everyone being greedy and trying to make off with the whole cake. Fast forward one generation of kids who are now grown-ups and you have an entire generation of music listeners who will not pay ... whatever CDs used to cost where you live. The toothpaste is not going back in the tube. The time when David Gilmour could make living sitting on his fat arse is over. He will just have to accept that, and the sooner he realizes that the good old days are not coming back, the sooner he can do something productive. Like cultivate new ways to raise revenue.

MichaelGG 13y ago

Further cementing my opinion that you should never find out about people you really like (authors, musicians, etc.) as you're bound to be disappointed. Pink Floyd may have a point. But by conflating profit and revenue they lose credibility in their arguments. Why resort to lame rhetoric? Pandora can be growing as a business and still losing money. The fact they had an IPO and got more users doesn't change the fact that they are (as of last quarter) still losing plenty of money.

k-mcgrady 13y ago
I think their point was that that's not the musicians fault. If you want to make a business distributing a product you need to find a way to pay for that product and then sell it at a higher price. You don't start the business and then try to force a pay cut on the producer just so you can make a profit easier. Pandora should focus on getting consumers to pay more (higher subscriptions, more effective advertising which they can charge more for etc.). Edit: It's obvious that the music industry has business model problems but in this case it's Pandora that has the business model problem. The industry doesn't need to lower it's prices - Pandora needs to figure out a way to pay them as they need the music more than the music industry needs them.
- themckman 13y ago
  It's kind of interesting that if the supplier of the good pandora was pushing was anything but an artist or musician, we'd be totally on their side for trying to get a fair price the goods they're providing. However, since the supplier is an artist or musician, they're the bad guys for wanting a fair price for what they produce.
- MichaelGG 13y ago
  Exactly. Their point should be that Pandora's business model is a losing one, that there's no apparent way for them to be profitable, so they need to charge more and let the market sort itself out. But I guess that takes the fuss away from their complaint. If you view it as Pandora's just losing money and likely to not survive then it makes people wonder why you're complaining in the first place.

jaryd 13y ago

Not really relevant to the current topic of Pandora's relationship to music, but for those interested in the historical problem with music (and the music industry), I strongly recommend reading "The Problem With Music" by Steve Albini (From The Baffler, No. 5, 1993)[1]. This was my first introduction to The Baffler, and led me to start reading their publications regularly. I don't always agree with the author's point of view, but almost always find the content stimulating. [1]: http://www.petdance.com/actionpark/albini/the-problem-with-music.html http://www.petdance.com/actionpark/albini/the-problem-with-m...

anigbrowl 13y ago
That's 20 years out of date, though. I am tired of hearing free music advocates basing their arguments on how bad things were in the music industry a generation ago.

salimmadjd 13y ago

OT: Give credit to Pandora to provide the fodder for Roger Waters, David Gilmour and Nick Mason to finally agree on something :)

RexRollman 13y ago
LOL, I was just thinking the same thing. Considering what broke them up, it wouldn't be surprising if Waters composed the whole thing.
- sinnerswing 13y ago
  "Welcome Pandora, welcome to the machine. What did you dream? It's alright we told you what to dream. So welcome to the machine."
  - SimHacker 13y ago
    "It came as a heavy blow, but we sorted the matter out."

Glyptodon 13y ago

I'll start believing in royalties when I start thinking it makes sense to pay an engineer for every car that crosses a bridge he designed for his life + 20 years or to pay the architect 10 cents every time I open my front door. Pink Floyd can sob 'till the cows come home, but it's not going to make me believe that <del>he's</del> they're entitled to money for something <del>he's</del> they've already done.

mrleinad 13y ago
Pink Floyd is the big guy trying to stand out for the little ones who get trampled on every day, and have no voice whatsoever. I doubt David could care less about those royalties. He has his own band and already has made a lot of money from PF.
chasing 13y ago
"Pink Floyd" is a band, not a person. Your first sentence betrays a similar lack of understanding about how royalties work. And bridge-building. And doors.
- tomn 13y ago
  "The band is just fantastic, that is really what I think. Oh by the way, which one's Pink?"
  - arbitrage 13y ago
    You must be lost; this isn't reddit. Do you have anything to actually contribute to the conversation, or did you just want to make sure everyone knows you heard a Pink Floyd song once?
    - qu4z-2 13y ago
      While I agree the comment didn't add much, I think your reply was perhaps also a touch rude. Then again, my comment isn't adding much either. And to tomn's credit, the lyric is a bit more relevant than just some random line: The root poster thought Pink Floyd was a person not a band. Apparently that's a common enough misapprehension that they mentioned it in a song... thence the quoted lyric.

DannoHung 13y ago

It's a pretty touch choice for artists, I bet: Make nothing or make next to nothing. The old days aren't coming back. Your unloyal customers will steal your product if you don't sell it cheaply enough for their liking. Subsequently, you either have the choice of trying to make money on your loyal customers only or changing your product. You could try stopping your unloyal customers from stealing from you from some means, but that has not been an avenue that has a high return since it tends to also involve treating your loyal customers like unloyal customers.

rdouble 13y ago
Except artists make more now than they ever have...
- lawnchair_larry 13y ago
  Could not be more wrong
bcoates 13y ago
> Your unloyal customers will steal your product if you don't sell it cheaply enough for their liking Like all those thieving bastards listening to AM/FM broadcast radio, which pays no royalties to performers? Home radio is killing music!

bborud 13y ago

I would have liked to see more numbers. How much does Pandora charge? How much do they pay in royalties? How much do artists make from radio royalties? How much did artists make in royalties from CD sales? How much have CD sales declined for Pink Floyd?

abalone 13y ago

Short on facts. What's this "85% pay cut" line they keep repeating? Unsupported and smacks of sensationalism. This thread has a much better discussion of the actual numbers. https://news.ycombinator.com/item?id=5935183 https://news.ycombinator.com/item?id=5935183 In short, Pandora is small right now and that's why the payout seems small. But by paying per-listener as opposed to per-broadcast, it has the potential to scale to higher payouts than traditional radio.

k-mcgrady 13y ago
>> "Short on facts. What's this "85% pay cut" line they keep repeating? Unsupported and smacks of sensationalism." You can find the info on where the 85% comes from in this story[1] but the important paragraph is below. "Pandora CEO Joe Kennedy appeared at a hearing on Capitol Hill in support of the Internet Radio Fairness Act, or IFRA, which would lower the amount of royalties that Pandora and other Internet radio services pay to artists. The industry has estimated the act would allow Pandora to reduce payments to artists by as much as 85 percent." [1]http://www.huffingtonpost.com/2012/12/04/pandora-artist-royalties_n_2239458.html http://www.huffingtonpost.com/2012/12/04/pandora-artist-roya...
- abalone 13y ago
  ...which has zero facts in support.
anigbrowl 13y ago
But the problem in the other thread is the assumption that a radio listener and a Pandora listener are the same. They're clearly not, because if Pandora streamed the same thing to every listener it wouldn't have any customers. People pay Pandora for music customized to their personal taste. From the musician's point of view, that makes it less effective than radio at reaching new listeners.
- dragonwriter 13y ago
  > People pay Pandora for music customized to their personal taste. From the musician's point of view, that makes it less effective than radio at reaching new listeners. More effective, I'd argue; sure, its likely that a smaller percentage of the Pandora listeners are new listeners, but the targeting of Pandora stations is more focussed better than radio so a larger percentage of the Pandora listeners that are new listeners are likely to become fans.

noonespecial 13y ago

Two things to always remember about this debate. 1) Pandora's biggest cost by ridiculously far is royalty payments. 2) Pandora is not now and has never been profitable. Lots of stuff is broken to make this so, but it's not a case of big bad "piratey" Pandora ripping off poor defenseless artists and laughing all the way to the bank.

wicknicks 13y ago
Just to add to what noonespecial says: 1. Royalty rates increase every 3-4 years. This is one of the big reasons why companies like Netflix have a hard time retaining contracts with content owners. 2. There are many middlemen involved in the online music/movie business. By the time everyone gets a cut, there is not much left in pool. This also ensures that everyone gets a very tiny portion. The online media industry is a complicated mess, and I don't see any long-term solution to it coming up soon.
genwin 13y ago
It's easy to not be profitable, though. Just pay large-enough salaries or invest in future growth what otherwise would've been profit.
- noonespecial 13y ago
  In 2011, Pandora paid over 50% of revenues in performance royalties. 50%. Of Revenues.
  - genwin 13y ago
    That's a much more telling stat.
    - embolism 13y ago
      Not really - it just means they aren't very efficient at monetizing music. Why should artists subsidize a channel that devalues their art?

driverdan 13y ago

The government has no business getting involved with this one way or the other. It's up to businesses to negotiate. If rights holders aren't happy with the money they're making they shouldn't sign the contract. If the bands aren't the rights holders then they really have no say. That's a whole other can of worms. My personal anecdote is that bands are making far more money from me than they did before. I'm discovering bands I wouldn't have know about otherwise. That's the catch 22. The big, well known bands will always make money whether it be through sales or streaming. The smaller bands are much easier to discover through streaming but may not make much money through it.

pavanky 13y ago

Relevant discussion on reddit: http://www.reddit.com/r/Music/comments/1gyylv/my_song_got_played_on_pandora_1_million_times_and/ http://www.reddit.com/r/Music/comments/1gyylv/my_song_got_pl... The artists don't seem to understand that Pandora simply doesn't have the scope or reach of their other revenue sources.

anigbrowl 13y ago
150m users is about half the population of the US. How big of a market does Pandora need before it offers decent terms to its suppliers?
- pavanky 13y ago
  But the users are listening to their own songs.

jejones3141 13y ago

Messrs. Gilmour, Waters, and Mason say "Artists would gladly work with Pandora to end AM/FM's radio exemption from paying any musician royalties – a loophole that hurts artists and digital radio alike", but if there's any evidence of their having done so, I've not heard of it.

digz 13y ago

Since Roger Waters revealed himself to be an anti-semite, I can no longer take anything he says seriously.

nextw33k 13y ago

What we are seeing here is an argument about value for money. The consumers are not willing to pay more for the end produce so what is left is the creators and distributors arguing over their share. The truth is that music is not a valuable commodity because so many people can produce good music. Being a musician is a blue-collar job, a technician (for the moment) is a white collar job.

scholia 13y ago

As Dave Birch pointed out on Twitter: "Dark Side of the Moon, used to illustrate, came out in 1973 - it should be in the public domain now" https://twitter.com/dgwbirch/status/349281727153319937 https://twitter.com/dgwbirch/status/349281727153319937