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Pandora Paid Over $1,300 for 1 Million Plays
- jcampbell1 13y agoThis makes sense. Another way to back into the figure: Pandora spent $82M on content according to the most recent 10Q, with 4.18B listener hours. That implies a cost of $0.02 cents per listener hour. A million plays is roughly 62500 listener hours, which implies a content cost of $1250.
- deleted 13y ago[deleted]
- hohead 13y agoInteresting analysis. Based on their cost of $0.02 cents per listener hour, I wanted to calculate how many hours per day my $36 yearly payment equates to (ignoring their operational costs): ($36 / $0.02) = 1800 hours per year 1800 hours per year = 4.93 hours per day
- sliverstorm 13y agoSounds like the pricing structure all works together very well, then. 5 hours per day sounds like a good point which plenty of people can easily eclipse, but the majority will not, keeping the service profitable.
- Retric 13y agoLicencing is hardly there only cost.
- sliverstorm 13y agoYes, but they said it was 50% of revenues. I believe Pandora is profitable, so the sum of all other costs must be less. This means that the breakeven point is actually somewhere between 2.5-5 hours. 5 hours per day is not a magic number- I think 4 or 3 also sound perfectly fine, based on the usage patterns I see.
- spullara 13y agoPandora is actually operating at quite a big loss: http://finance.yahoo.com/q?s=P&ql=1 http://finance.yahoo.com/q?s=P&ql=1
- tsotha 13y agoI don't see much value in an analysis that ignores operational costs.
- arantius 13y agoSorry but .. "$0.02 cents"? Do you mean "$0.02", or "2 cents" or two hundredths of one cent, or something else? Is this Verizon writing? ( http://verizonmath.blogspot.com/2006/12/verizon-doesnt-know-dollars-from-cents.html http://verizonmath.blogspot.com/2006/12/verizon-doesnt-know-... )
- jcampbell1 13y agoI meant $0.02, aka 2 cents. Sorry about that. It is an easy mistake to make at 2pm in the morning.
- darth_aardvark 13y agoDo you mean...2 am?
- cloverich 13y agoAnd... that was the joke :)
- RKoutnik 13y agoComing up next: An article titled "I coded in Silicon Valley for six years and only made $1,000[0]" [0] Not including salary.
- Glyptodon 13y ago> "On the contrary, it seems quite likely that others should be paying more." Not that have knowledge of royalty proportionality, but it also seems unfair to have royalty costs dwarf any other business costs. I have no idea how much it costs Pandora to stream a song, but if it's a fraction of the ~$0.0012/listen they seem to pay in royalties, it seems like the royalty is disproportionate and unfair. On the other hand, if the royalty is more than ~2 orders of magnitude less than cost to stream a song, then maybe there is an argument that it's too low. (of course the above is assuming you agree with royalties at all.)
- ianterrell 13y agoWhy do you think other business costs are pertinent to royalty rates at all?
- ChuckMcM 13y agoOne way they would be pertinent would be if the royalty rates are the reason the business is unsustainable, then the question arises if the goal is to have other folks hear the music or not. So there is a cost to deliver songs (servers, bandwidth, devops, engineering) which is analogous to the old radio days of the engineer, power, transmitter, tower maintenance, etc. And there is the revenue from advertising and/or subscriptions. And there is the royalty rate. If you are managing your on-going costs to a minimum, your ability to sell advertising/subscriptions is a market thing (people will or won't buy the service based on the perceived value to them) and then your royalties come out of that. How would make an argument that royalty rates aren't pertinent?
- Glyptodon 13y agoWell, I don't really believe in royalties to begin with, but if you're going to have them... I think royalties should be set in a way that maximizes what I'd call the versatility of utility. If royalty costs are far beyond the actual infrastructure or service costs, it seems as though entire industries and uses of content cease to exist. It also seems pretty clear that huge differences between prices and real world costs are what lead to extensive piracy - people develop a perception of being cheated when you try to charge $25 for an e-book or album download. On the other hand most consumers seem to feel fine about paying $1 or $5 for a song/album/e-book. You could argue that 'oh, the creator should have the right to control what they make as much as they want and charge whatever they feel like,' but it seems pretty clear that given free reign, copyright holders feel entitled and abuse copyright in ways that entirely undermine the whole system. I'd say that if you believe in copyright there's a legitimate interest in restraining royalties to reasonable amounts so as reinforce the legitimacy of the whole system. After all, the perceptions of gouging and rights abuses create large masses of people like me who no longer believe in copyright as a whole to any great extent. Ensuring the liberalization of restraints and apparent reasonableness of exercised privileges allowed creators seems key to creating a copyright institution that can survive and appear legitimate in the long run.
- Afforess 13y agoIts easy to complain about the low pandora royalties, but these artists are essentially trying to kill the golden goose. Pandora currently spends > 50% of revenue on royalties. Any increases would almost certainly lead to the end of the company. $0 is a lot less than $1,300 for 1 million plays.
- tveita 13y agoRelevant opinion: http://www.usatoday.com/story/opinion/2013/06/23/pink-floyd-royalties-pandora-column/2447445/ http://www.usatoday.com/story/opinion/2013/06/23/pink-floyd-... > "We've heard Pandora complain it pays too much in royalties to make a profit. (Of course, we also watched Pandora raise $235 million in its IPO and double its listeners in the last two years.) But a business that exists to deliver music can't really complain that its biggest cost is music." Sounds reasonable enough to me. Do they have any other major expenditures besides hosting?
- jcampbell1 13y agoFrom the most recent 10Q. Revenue was $125M ($105 Ads / $20 Subscriber). Expenses: $82M Content, $10M hosting, $7M Prod Dev., $40M Marketing/Sales, $14M All Other. Net Result: $28M loss.
- chiph 13y agoI wonder how much of that marketing costs are from their own interstitial ads between songs? I would think the cost to them is $0, but I wouldn't be surprised if they valued it at market rates. Perhaps to keep the IRS happy.
- awa 13y agoIf they show a expenditure of $40M in MArketing for pandora ads, they are probably adding that $40M to their revenue
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- thehme 13y agoConsidering that I have bought several CDs because I heard them on Pandora, I am sure everyone is getting money, but it usually is never enough. I don't know what exactly the cost of running a Pandora company means financially, but with all the upgraded, changes, improvements I expect from it, they definitely need money to pay the developers, so that we, the listener can love the music and buy the albums, which I would think is what the artist ultimately wants.
- smacktoward 13y ago> I don't know what exactly the cost of running a Pandora company means financially Well, Pandora is a public company, so they have to disclose all that stuff. Which means we can look it up! Transparency is awesome. According to their latest annual report (http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MTgxNzIxfENoaWxkSUQ9LTF8VHlwZT0z&t=1 http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9M...), in fiscal 2012 Pandora brought in $274 million on $285 million in operational expenses. Of those expenses, $149 million were for content licensing. Product development accounted for $13 million. Of the money they made, the vast majority ($240 million) came from advertising.
- gizmo686 13y agoAt risk of sounding stupid, $274-$285<$0. How does that work?
- endersshadow 13y agoHow does a company lose money? They didn't start from nothing--they have money in the bank from equity infusions (e.g.-going public). You lose money if you make less than you spend. That's what happened here. Edit: Also, these numbers aren't just cash. Revenue is realized when it's earned, not when it's actually paid. So, for example, if Pandora provides $50MM of advertising, and then bills that, it records $50MM of revenue, even if it hasn't received all of that yet. Instead of being counted in cash, it's counted in accounts receivable (commonly abbreviated as A/R). This adheres to GAAP (in the US).
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- arange 13y agoIf I learned anything from reading this article, music royalties are an extremely hard and complicated thing. Hat tip to them for even attempting to do business in this kind of insane environment.
- aresant 13y ago"A good flatterer doesn't lie, but tells his victim selective truths (what a nice color your eyes are). Good PR firms use the same strategy: they give reporters stories that are true, but whose truth favors their clients." I have no idea if David Lowery's original post about making only $16.89 for 1 million plays was distributed by a PR firm, but it sure feels like it. PG's thoughts on PR are spot on, and I love referencing his article to both discern truth from half-truth in the news, and, of course, to push my own PR efforts: http://www.paulgraham.com/submarine.html http://www.paulgraham.com/submarine.html
- smackfu 13y agoA PR firm would have been much more selective with the truths.
- jusben1369 13y agoI always think of the Excorcist quote about how the Devil doesn't lie but rather mixes lies with the truth. That's what makes it truly perplexing.
- yajoe 13y agoI imagine the minority here is aware that Pandora now owns a radio station, and their goal is to use the radio station to get more favorable terms for licensing. (wsj story: http://online.wsj.com/article/SB10001424127887324904004578539983107566860.html?KEYWORDS=pandora+south+dakota http://online.wsj.com/article/SB1000142412788732490400457853... ) I interpret these stories and their timings as a prelude to undermine Pandora's bargaining position. It's clearly PR to extract 'higher' payments, even though Pandora already pays among the highest per-listener rates in the US across all mediums. The blog author and parent are spot-on.
- svantana 13y agoIt's also mentioned in the OP.
- guelo 13y agoYea, the Pink Floyd article suspiciously came out at the same time yesterday in USA Today. And with legislation coming up in congress you know the lobbying pressure is ramping up.
- alphamale3000 13y ago1 million plays on Pandora is like one play on FM radio with an audience of 1 million, or 10 plays with an audience of 100,000. Either way, their royalties are more expensive than ones of radio stations. Pandora just bought an FM radio station in an effort to reduce its royalty rates. http://www.engadget.com/2013/06/11/pandora-buys-fm-radio-station/ http://www.engadget.com/2013/06/11/pandora-buys-fm-radio-sta...
- masswerk 13y agoSo http://masswerk.at/404 http://masswerk.at/404 just got 1,017,260 hits this month generating no revenues at all ... (as of June 26, partly thanks to a post on HN earlier this month) Meaning: all this "1 million of anything must be worth tons" isn't really what everything should be all about.
- veritas20 13y ago"Industry is shady, it needs to be taken over Label owners hate me, I'm raising the status quo up" - Jay-Z, Izzo There are way too many hands in the cookie jar and it's way too easy for artists to connect directly with fans and sell to them directly. The current model serves the labels and associated organizations.
- aston 13y agoIf I told you there was an e-commerce company without a profitable year in over a decade of existence despite federally-mandated price ceilings placed on their suppliers, you'd be incredulous. If I then added that the same company was lobbying in Washington to get the price ceiling lowered, the pitchforks would be out. But then mention it's a company selling music, and people shrug, "Oh, well music should be free anyway... The artists should be happy they get anything."
- encoderer 13y agoBut then you told them that the suppliers used a cartel model to prevent true competition in the marketplace......
- aston 13y agoI'm not sure what you're saying here. Are you claiming that what's stopping the average artist from selling as many records as Justin Timberlake is collusion among the major record labels?
- atondwal 13y agoNo, he's saying that what's stopping the average artist to get a high a royalty percentage as Justin Timberlake and stopping pandora from paying radically less for the music is collusion among the major record labels.
- winterchil 13y agoNot if the price ceiling were selectively enforced against only one type of radio station. In your analogy this would be the e-commerce company has to buy twinkies from their supplier at 8x the price everyone else pays by government mandate.
- aston 13y agoWhy's the price matter? Any store that buys merchandise it can't sell at a profit is making a basic business mistake. Separately, to your point about unfairness, I suspect that both radio and internet streaming prices are lower than what the market would set if the government didn't intervene.
- shortformblog 13y agoFrom the original post: "I am also paid a seperate royalty for being the performer of the song. It’s higher but also what I would regard as unsustainable. I’ll post that later this week." Footnote from this post: "He does clarify in the footnotes that $16.89 is only for 40% of the songwriting and there is a separate performance royalty, but certainly the headline & coverage could leave many with the impression that $16.89 was everything." I'm not defending Lowery—he clearly wrote that post in an effort to draw negative attention to Pandora's practices—but he stated that the documents he threw online were outlining songwriting revenue—he made that delineation in the very first line of the post.
- wmf 13y agoArguably songwriting is kind of a dead field anyway since in recent decades bands mostly write the songs they perform.
- route66 13y agoI don't know what channel you are listening to, but in general there have always been musicians (and bands) writing their own music as there were have always been musicians performing songs composed by others with lyrics written by others. Songwriting is about as dead as cooking.
- ImprovedSilence 13y agoFrom what I've seen, it depends on what you listen to. Pop, country, and R%B are largely written and produced by someone other than the performer (hence, they are called "acts"). Most rock/inde/actual "bands" will do their own writing 90% percent of the time.
- _delirium 13y agoWith the fields dominated by acts, how people make a living gets even more convoluted. Some songwriters who regularly work in-house for a label get paid "advances" that are really more like salaries (regular monthly payments, sometimes considerably higher than the expected royalties). That's especially common for career songwriters in-house at places like Nashville. Young pop or hip-hop songwriters hoping to use it as a stepping-stone to become an act themselves might not get paid a salary.
- blhack 13y ago"Pandora advertised my product to 1 Million people and only paid me $1300 for it!"
- wmf 13y agoI can't speak to Pandora specifically, but Spotify is often pitched as an alternative to buying music and it also pays comically low royalties.
- notatoad 13y agoComically low compared to what? Sure, compared to a CD sale they are low, but the royalties on a CD sale cover all future listens, by all future owners of that disc. Royalties on radio playback pay for one listen by tens of thousands of people. Royalties from a stream pay for one listen by one person, of course they are low.
- whiddershins 13y agoPandora didn't advertise the product. They delivered the product. The product is the MUSIC YOU ARE LISTENING TO. The experience of listening to music. If you don't understand that, you shouldn't even participate in the conversation.
- gems 13y agoOr you could say that playing one song is an advertisement for the album or for the artist. There are many artists I wouldn't have otherwise known about if it wasn't for pandora. "If you don't understand that, you shouldn't even participate in the conversation." This is childish. "If I can't conceive of any other perspective, then you shouldn't open your mouth!!!!"
- whiddershins 13y agoSeriously, you can SAY a Honda Fit is an advertisement for Honda cars in general. But the car is still the product. Only with music. With no other product than music, do people in our culture so consistently rationalize getting one thing for free as exposure or advertising for some hypothetical other revenue stream that will one day happen down the line.
- gems 13y agoWhy do entertainers feel so entitled to high payment? Why is this even a story?
- deleted 13y ago[deleted]
- wmf 13y agoIt's part of a larger discussion. If even stars don't make enough money to live, a lot less music may be created in the future.
- mbreese 13y agoYou seem to be under the impression that being an entertainer is easy, or that they shouldn't make a living wage, or be able to profit from their work... Everyone's gotta eat. What we're seeing now is the natural give and take within the industry adapting to new norms and business plans. From a higher level view, it's fascinating.
- gems 13y ago"You seem to be under the impression that being an entertainer is easy" No I'm not. If something is not profitable, then do something else that is. Don't complain that you're not being paid enough.
- johnward 13y agoYou are projecting feelings that the op didn't mention. No one is entitled to a meal in a capitalistic society. You have to "earn your keep" so to speak. Everyone does have to eat, but that doesn't mean you're entitled to eat off of your music. If music isn't working out maybe these artist should get a "real job". Most of these artist are still following a a business model that is broken. I'm not sure why they feel they are so entitle to high income. Maybe it has something to do with that carrot that the record industry dangles out there. Every feels like they should be making Beyonce money or something. Why is it that radio royalties and album sales seem to be all they focus on when they get such a little cut anyway. It seems like building a following and then getting that following to pay to go to your concert and buy your merchandise directly is much more profitable. There are some musicians that recognized they would never make as much as they would like in that business. Look at someone like 50 cent. He realized that royalty payments wouldn't be enough. From the start he created a brand around his name and his crew G-unit. From that they were able to sell clothing, get exclusive sneaker deals, negotiate for their own label, etc. With that money he invested in outside deals like Vitamin water which made him much more money than his music did when it was sold to Coca-Cola. This is someone that understands the business and how to leverage it to benefit you more than it benefits the industry. It's been shown time and time again that artist do tend to get fucked, but it's not just internet radio providers doing said fucking. How much of the royalties get paid out to labels, managers, and anyone else that has their hands in the artist pocket. Maybe if they could negotiate better terms they would get a bigger piece of the royalty pie. Look, I get paid what I think is a decent amount at my job. My employer has no obligation to pay me that much. They do it because I have valuable skills in a competitive market that they are willing to pay for. I also provide much more value than the salary that I earn. If for some reason those skills weren't desired or I wasn't able to make a living from them I would attempt to move on to something new. I really don't know why I'm rambling so much. I do wish artist could make a living, but I don't think they are entitle do earn a living wage making music. Watching this industry try to keep their failing business models alive is pretty interesting though.
- 205guy 13y agoWhat I think is missing from this whole discussion is the ability to make a living. Sure the industry is opaque to outsiders, and some of the established practices are weird (radio paying only songwriters, not performers), and now it's all being disrupted. But forget about the numbers for one song. Let's say a guy like the OP of the other article works full time as a singer song-writer. He writes a few songs, performs some of them, has others (more popular artists) perform some of them, and maybe he plays a few gigs himself (either as a musician in someone's band, or good enough to do his own shows). Let's say he's median successful. One or two of his songs (either recorded by him or someone else) is close to charting. People are listening to it online and radios are playing it. Other songs are getting played but not getting the same traction. He works 50-60 hours a week on music, either writing, recording, or performing. What kind of living can he make? a) 20K and lives off of another job? b) 40K and struggles to pay rent? c) 60K and can survive? d) 80K and considered successful? e) 100K and lives comfortably doing what he loves? f) More and can live in expensive parts of the country (NY-SF-LA)? How was it in the old system of labels and DJs? How has it changed with Pandora and iTunes?
- mikegioia 13y agoI would say (d). A friend of mine was on a plane next to someone (I think in Deerhunter) and she was talking to him about his salary oddly. I remember it being around 80k but he wasn't working 50-60 hours a week. I think someone at that level is closer to 25-40 hours.
- ThomPete 13y agoThe ability to make a living is not a right, it's an opportunity. The same opportunity that made it possible for artists to record once and resell in the millions is now working against them. Where where they when the distribution companies who used to make a living from the music industry was laid off? Or the record stores? It's not a right, it's an opportunity.
- tunesmith 13y agoThis is simplistic. Major labels still have the relationships which allow them to dictate favorable terms to these services that supposedly are so great for indies. These favorable terms mean that the services need onerous terms from the indies in order to break even. This effectively means the indies are subsidizing the major labels. That dynamic needs to change before we can argue that this meets some level of fairness.
- mech4bg 13y agoNot much has been made of the fact that skips count as plays... I wonder what proportion of plays are skips. Does anyone have information on what a radio station pays for one play of a song, when they have an audience of, say, 100,000? Edit: ah, I should have finished reading the original link, they make the latter point well.
- hexis 13y agoOn some days, I wish companies like Pandora, Spotify, and Rdio would just voluntarily shut down. If the music industry thinks streaming companies are ripping them off, the music industry is welcome to build their own streaming business and show everyone how it's done. Musicians were complaining about royalties and payment long before the internet was invented and they'll be complaining long after we're all gone. Keep that in mind when they act like streaming is the new scourge of music.
- thijsc 13y agoSpotify is owned partially by the music industry: http://www.guardian.co.uk/music/musicblog/2009/aug/17/major-labels-spotify http://www.guardian.co.uk/music/musicblog/2009/aug/17/major-... I'm sure the labels are very happy to keep making the same margins they used to with these new distribution channels. The music industry is doing fine here, it's just the artists who are getting a small piece of the pie.
- dtf 13y agoMaybe this is the crux of the issue. The labels would like to shut down the competition and control the channel as did before. It would explain the PR blitz.
- bjelkeman-again 13y agoIndeed. Pay to play, every singe time things are played they want you to pay, and be in control. What is missing often from these discussions is that a lot of bands and musicians could deal direct with a service like Spotify. But that would cut the record companies out of the loop and hey are fighting this tooth and claw. So they essentially have a cartel controlling Spotify and making sure the pressure is on for the rest of the industry. It will be interesting to see them end up in the middle, making millions as they have manoeuvred themselves into controlling something hat could hav been an efficient market with few middlemen.
- k-mcgrady 13y agoI don't think the music industry has a problem with streaming (Pink Floyd who started this renewed debate yesterday just got added to Spotify). The problem is that Pandora wants royalties cut - because their business model doesn't work. If they can't afford to distribute the product they need to raise prices or shut down. They can't make the producer look like the bad guy. Trying to get the producer to lower prices because your business model is a failure is ridiculous.
- crocowhile 13y agoI don't quite get the point of this. The original article already said what it had to be said: For frame of reference compare Sirius XM paid me $181.00 Terrestrial (FM/AM) radio US paid me $1,522.00 All the artist cares about is how much it gets at the end of the day.
- chockablock 13y agoPlease actually read TFA: artists get performance royalties from pandora, but not from terrestrial radio, but these were not included in the $16.89. Also, terrestrial radio plays likely reached many many more listeners than pandora did.
- crocowhile 13y agoSatellite pays performance royalties. The fact the terrestrial is listen by more people is actually a plus for the artist, I think (more happy listener = more potential CD buyers)
- Dylan16807 13y agoI think you're screwing up your logic here. While I will agree that more listeners per royalty means more CD purchases, think through the implications of that. It means that the best situation for CD purchases is one with minimum royalties, in fact it's a situation with negative royalties causing large play counts. Also known as payola. Which means your original argument about royalty payments is disproved...
- ThomPete 13y agoI have said it before and I will say it again. 20 years ago that and thousands of others songs wouldn't even have been played anywhere and definitely not a million times. If you want to live off of making music or as an author or anything else you have to think like a publisher not an artist. Playing music is a joy, something you can enjoy whether you make money or not from it. Living from making music is an opportunity not a right.
- Dewie 13y ago> 20 years ago that and thousands of others songs wouldn't even have been played anywhere and definitely not a million times. Ironically that song was a hit exactly 20 years ago... so no, it managed to do just fine without a streaming service. But yeah, I would never go back to the old model of radio and music only being on physical media. In fact, we can't at this point. > Playing music is a joy, something you can enjoy whether you make money or not from it. Other than an on average greater passion than in other professions, music sometimes has the potential to be "just a job". You might dream of coding the next greatest physics engine, but you are stuck making the same boring apps in a domain you don't care about. Similarly, you might dream of composing and playing rock operas but you are stuck doing crummy session work for R n B artists. It's not that R n B is bad, but not every musician is necessarily a person that has passion for all kinds of music and all kinds of gigs in the music industry. But yeah, making a living from it is not a right, just like any profession.
- ThomPete 13y agoBut many musicians unfortunately argue as if it is.
- jccalhoun 13y agoActually, I think that if you want to live off of making music you should think like an artist and plan on making most of your money by actually playing music instead of hoping that you can make a living off of music you played decades ago. Intellectual property and royalties were only invented less than 200 years ago and there's no guarantee that people will be able to depend on that as a source of income in the future.
- chinpokomon 13y agoIt seems the biggest problem is the metric used to establish royalties. Broadcast mediums like radio can't accurately account for how many listeners they have, and so their licensing terms are based on plays. Pandora on the other hand knows exactly how many listeners it had, because the stream is per individual, nit broadcast. Neither medium accounts for inactive listeners, but I would expect the distribution would be similar. The bottom line is that Pandora is closer to every individual having their own radio station and so of course you cannot evaluate their worth the same way, despite what the original article was trying to do. Pandora's model actually works better for the artists, since there is metadata that could be used to spy on American citizens... whoops, wrong story; that could be used to connect to fans in markets the artist may not have had access to previously. Maybe Pandora should be selling that information to the artists and labels, although I don't know that they don't do that already. Both radio and Pandora are more appropriately described as advertisement. Playback restrictions of both formats means that listening to something is not purely selective in the part of the listener. I can't request that Pandora play Cracker's Low, anymore than I can shout that request to my radio. However both give me exposure to music that I might not otherwise hear. Extra credit goes to Pandora for giving me easy access to the Artist, Album, and Song Title, as well as up sell links whereby I can purchase the music I'm listening to. Pandora provides much more value than terrestrial broadcast - value for which the music industry should probably be paying Pandora. I fully appreciate the positron Pandora finds themselves in, but they aren't in a fair fight, and the artists that should be supporting them don't seem to understand that distinction for their own good.
- Nux 13y agoHoly cow! Anyone else thinks the Record Company takes way too much of the profits??
- ghshephard 13y agoI wonder what the performers/songrwriters think of the fact that I purchased (used) Aerosmith's Hits CD about five years ago for $3.00. I've probably listened (in various formats) to that CD about a hundred+ times in the last five years. There are 10 tracks, so, 1,000 plays for which everyone (Songwriters, Publishers, Performers, Distributes) - all received $0.00. Multiply that by 1,000 Aerosmith fan's who bough a used CD, and you have 1 Million plays that generate $0.00 for the music industry. I wonder if the Music industry feels that they are being treated unfairly by the Used CD Marketplace? Or how they feel about people just purchasing $4-$5 CDs used (S&H included) off of Amazon - the combination of low cost + convenience. Ironically - in the last year, I signed up for iTunes Match ($25/year), so in theory, every time I listen to this CD the various contributors are once again receiving revenue.
- RexRollman 13y agoThe labels would outlaw used CD sales if they could. I know in a couple of states, efforts have been made: http://www.wired.com/listening_post/2007/05/used_cd_sales_l/ http://www.wired.com/listening_post/2007/05/used_cd_sales_l/
- tunesmith 13y agoAs a performer/songwriter, I don't have a problem with that used cd bit conceptually. All those cds were originally sold full price, generating full revenue. The original purchaser bought it for full price, and assuming I'm a major artist like Aerosmith, that's big money in the aggregate. A cd isn't rent, it means you get to enjoy that stuff for as long as you own it. If the original purchaser wanted to transfer that ability to someone else even for free, I don't have a problem with it. I don't see cds as somehow being linked to the original person's lifespan, or a time-value of how long he's likely to listen to it. It's the existence of the cd, period. The fact that he got three bucks for it, more power to him. Now, if he instead ripped the cd to continue his enjoyment and then sold or gave it away, to me that's the same as keeping the cd and letting you rip it (either for free, or for three bucks). That's not okay. He clearly liked it enough to "keep" it, so he should have kept it. In which case (if everyone else acted the same way), you would have bought a new copy, which means more money for the artist. At any rate, you, by purchasing a used cd, did nothing "wrong" from any perspective in my book, because it can't be on you to ensure that the seller will no longer listen to or enjoy the music. But people that sell their used cds, technically they're stealing if they keep their rips after they sell it. Or at least "stealing", in the sense that it's the same as letting someone else rip/burn their copy.
- CulturalNgineer 13y agoIf you could BUY a download or certain number of plays of the song for a nickel or a few cents (one-click and without transaction costs making it impractical)... Would you? patent issued... demo built and tested... its called a pooled-user-determined account which forms the root for an internet wallet. I'm a terrible entrepreneur but despite that the concept seems to be making progress... especially for its potential in lobbying.
- nickjamespdx 13y agoShould've gone Vadio.com / Terrestrial. Exposure + better pay per spin/play.
- tunesmith 13y agoThe graph is funny. Pandora agrees it is roughly accurate. So, a payout (revenue; before expenses) of $1372 for 1,159,000 plays. Well, let's look at it in terms of an album where all songs are played equally. In reality, some songs will be played more than others. Assume an album of 10 songs. Okay, that's $1372 for 115,900 complete album plays. Well, you can sell an album for $10. More, actually, but let's say $10 since that's the digital rate. And you hope for repeat listens out of an album... ten listens? 100 would be pretty great, actually, maybe that's a true fan. Well, 115,900 complete album plays for $1372... at ten bucks apiece, that's akin to each purchase being played 1,000 times. In other words - ignoring other benefits of Pandora - you don't want to use Pandora to "sell" your music unless you have reason to believe that album purchasers would listen to your album 1,000 times or more. Only at that time would Pandora be worth it. That of course doesn't take Pandora's discovery benefit. I don't know if that would be enough to knock the numbers down to 100 or 10 album listens, but I suspect people often overestimate Pandora's discovery benefit. Just because a listener might discover a lot of new music doesn't mean that an artist gets a lot of new fans from Pandora.
- tunesmith 13y agoI should offer my own counterpoint here. That analysis ignores the question of whether Pandora plays "rob" from anything else. But since Pandora songs aren't available upon request, it doesn't rob album sales. It's basically gravy. Now, someone who makes a lot of money off of radio plays, and sees radio plays shrink as Pandora plays increase, they might still feel they have a beef due to the lower songwriter royalty rates. Spotify, on the other hand, is different. Spotify does rob album sales.
- ppradhan 13y agoMaybe.. just maybe... the market is beginning to correct the monies earned by musicians. The heyday of yesteryear when (successful )musicians were paid obscene amounts was due to 1. fewer mainstream musicians and 2. overcharged customers who had no other means of acquiring music and had to pay the price record companies saw fit. Unsuccessful or moderately successful musicians didn't make a lot even back then. Now, musicians are basically fighting for attention among a greater number of competitors. The choices are more varied. The output per year has grown significantly and internet has brought international music into the fold further increasing competition for 'ear-time'. This should make one ask the question: what is the worth of musicians? Why was the high figures of the last decades the 'right' level of earnings and why are they being 'ripped off' today? Is the alleged ripping off due to content delivery platforms (like Pandora) truly taking a larger cut of the revenues compared to delivery platforms of the past (record companies and retail distributors)? It is not exactly pertinent to put past and present in the same basket, compare the numbers and bring out the pitchforks. Circumstances have to be looked at, and that little question of what the musicians are 'worth' needs to be thought about. What makes musicians worth more than a farmer or a checkout clerk. An even fairer comparision - why is their an income discrepancy between a successful musician and a successful calligrapher. If the worth is more, the market will decide. A given musician will have to continue making music despite low pay if music is their true love. If not, time for career change. The music industry and consumption is maturing. Musicians need to do the same. There's no point fighting the ebbs and flow of the market by crying foul. My opinions here are bound to be 'polarizing'. Do discuss.
- dllthomas 13y ago"I'll prove to you that I am bad enough to get into hell, because I have been through it! I have seen it! It has happend to me! Remember: I was signed for Warner Brothers for eight fucking years!" - Frank Zappa