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Pandora Pays Artists $0.001 Per Stream, Thinks This Is "Very Fair"
journovampire writes with this story about how much artists make on Spotify. "Pandora founder Tim Westergren has claimed that the company is paying out 'very fair' sums to artists, despite its per-stream royalty weighing in at just one sixth of Spotify's. The digital personalized radio platform has previously gone on-record as saying that it pays music rights-holders approximately $0.0014 for each play of their tracks: Westergren blogged in 2013 that Pandora pays ‘around $1,370 for a million spins’. That’s around 80% smaller than Spotify’s per-stream payout, which officially stands somewhere between $0.006 and $0.0084."
How much does a radio station with, say, a million listeners pay when they broadcast a song? Pandora seems to sit somewhere between radio and Spotify as a service and so I would expect the royalty rate to be somewhat more than radio and less than Spotify.
I thought that Pandora didn't pay the artist anything at all, but rather paid the label who then pays the artist. So how much money does the label get?
There's no such thing as "fairness" - it's a fairy tale concept that causes humans far too much suffering.
I would love to get $1300 for each million user sessions served by a system I designed - holy cow that would add up. I get paid for a job, and that is that. I realize that artists often sign bad business contracts (when I do, I just lose money - boo hoo).
But regardless Spotify and Pandora aren't equivalent - the songs I hear on Pandora are often ones I've never heard before. I've bought CD's based on its generated recommendations - Pandora is a promotion platform for artists. Spotify tends to be more for music on demand. It's nice that Pandora also pays the artists for the airtime - I'd imagine Pandora would survive just fine only playing for promotional value.
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Personally, I'd like to be able to get royalty payments every time somebody used one of my commercial software programs or one of my hardware devices. Think about it. You spend a few months writing a piece of software and then get paid for it for life. Quite frankly, IMHO, the entire royalty business model is broken because while the original intent may have ensured that the "artists" weren't being taken advantage of, it's gotten so out of control that these "artists" have now been brainwashing into believing that they are oh so much more important than everyone else and that their opinions on things they know nothing about are to be taken seriously.
..and I like it even less now. Tried Pandora a few years ago. Was rather annoyed with the way it worked so I ditched it. Reading this now, and knowing many producing musicians, I like it even less than I did before. The music industry has always more or less shit on artists, and apparently Pandora is no exception.
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Artists paid 16 times as much for Spotify than for radio
Lots of caveats (British radio, British currency, article is 18mths old, Spotify vs Radio, no label involved, one artist is both singer and songwriter + some other assumptions), Spotify pays 16 times what an artist gets from a radio play, per listener.
from http://www.forbes.com/sites/timworstall/2013/07/17/spotify-royalties-appear-to-be-awfully-high-despite-what-thom-yorke-says/
The implicit argument in this clumsily biased summary is that Pandora is paying too little. But does that hold up to scrutiny? From an economic perspective, it is an easy thing to measure. Music economics runs on artificial scarcity, copyright. So the amount of money flowing into music is not something naturally regulated by the free market, but a decision we make by adjusting the lever of copyright law. Something we've been turning up for a century now. So here's the underlying question: Are we dedicating enough of our economic resources to this industry whose cashflow is predominately artificially generated by law?
Are we spending enough, as an economy, on the production of music, or do we have a shortage of people willing to enter the music creation business? If there is not a shortage, we do not need to increase copyright cashflow. If there is a surplus -- if, as an example measure, we have too many kids neglecting their studies to pursue pipe dreams of superstardom -- we should be making copyright less strict and shifting some of our GDP into other productive industries.
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They are being paid 1/1000 of a penny (0.001). 99,000 listens would net you the same as one .99 cent. How long would it take the average listener to to listen to one song 99,000 times?
What chip? It's a useful distinction that actual exists now in the real world. It's relevant to the discussion.
Performers don't get paid for radio airplay but songwriters do.
A Pirate and a Puritan look the same on a balance sheet.
In spotify's case we know the artists get scrap because they have shit deals with their labels and the labels keep all the money. So how does this compare to Pandora?
Why do artists expect to be paid at all for recordings of their music? For a very brief period in history, making money off of recordings was made possible by a coincidental combination of technology and artificial scarcity caused by the cumbersome nature of physical media. Before the advent of physical recordings, musicians had to make money by performing. After the advent of digital recordings, musicians will once again have to make money by performing. Anything else will prove to have been historically anomalous.
Making and distributing recordings will still be in artists' interest, because they will serve as a way to generate demand for performances. That is, recordings will become a form of advertising, which will be distributed for all intents and purposes for free, or even at the expense of artists.
Can we quit wringing our hands about this now? Art will survive just fine.
While true, it's irrelevant for two reasons:
1) The radio doesn't play the songs you want on demand; and
2) The radio is effectively a way to drive album sales. Spotify is a REPLACEMENT for the album.
It used to be that it was worth it to play your songs on the radio (even at a loss) because people that liked your one song might want to hear the 10 hours you wrote--that would never be heard on the radio--and spend $10 on the album.
Now you pay Spotify $10/month for unlimited access to the entire album. To the entirety of the artist's catalogue. To the entirety of all the included artists' catalogues.
This is obviously and trivially less money than any one of those artists would make previously from you if you liked their music. Perhaps the argument could be made that more people are listening and giving a tiny amount of money to each artist, but I rather think that given the stats I've seen, this isn't even close to true.
This is much different from the time when people were pirating albums, since many fans would go out and buy an album that they downloaded because they wanted to support the artist. Now people feel that because they're paying $10 to Spotify or Rdio that they ARE supporting the artist. They're not going to pay for a subscription AND an album. That's exactly the opposite of the point of these services.
They need a new model. Streaming on its own for $10/month is clearly not enough money to go around. Spotify has infrastructure costs and has been bleeding money (I think they had a break-even or profitable quarter just recently?). Meanwhile, they also need to distribute the remainder of the already paltry $10 between a zillion artists. It makes no sense.
If people weren't so set on getting Free Shit, this wouldn't be a problem.
But it seems a lot of people think they have a RIGHT to listen to music, created by others for the purpose of selling and providing an income, for FREE.
Look at all the bitching and moaning that happens on Slashdot about how shit should be free. Fuck You. Shit cost money to make and distribute and you fuckers should be paying for it.
Then why are they in this business? If musicians can't find another way to make money, they need to find a job that will get them some.
For many musicians, they tend to get into this as if it was the lottery. That is, they go in there expecting that they can write some songs and make an actual living off of it, with no actual evidence that they can. Some of them make it huge, but most don't.
So why are they making music? Because they want to. And why am I paying them to do what they want to do? No one pays me to play video games, even if I have a phenomenal kill ratio and a winning record.
I don't owe musicians anything. If they have a product that I need to get from them, or I want to pay them for, then fine. If I don't think their stuff is worth more than some fraction of $10 a month, then that's their problem. If musicians can't live off of that, then they need new management or a new career. That's exactly what I'd need to do if what I did brought in no money.
But it seems a lot of people think they have a RIGHT to listen to music, created by others for the purpose of selling and providing an income, for FREE
"I have a right to listen to music" makes a lot more sense than "I have a right to be paid for my hard work." Nobody has a _right_ to be paid for working. If they did, homeless people could dig ditches and fill them in all day and get paid for that because they were working really hard.
all the bitching and moaning that happens on Slashdot about how shit should be free.
Where? I don't see it anywhere.
I do see people pointing out that shit _used_ to be free: no compensation at all to the artist for radio plays in the US, compensation at 1/8th what Pandora pays in the UK.
Shit cost money to make and distribute
kinda seems like Pandora's doing the distribution in this case: promotion, discovery, transmission of the music, negotiation of deals, collection of money, all of it. iTunes and Google Music will even deal directly with artists, though most of them seem unable to figure that out. I guess you're saying we'd better make sure these new guys are paid adequately for their hard work, and aren't being squeezed too hard by the greedy record labels who keep making news cycles like TFA to build up hate toward the companies that are about to make them irrelevant?
How about a model where the artists only continue to get paid if they continue to work. You know, like the rest of us? Let's call that model the "Touring and Selling T-Shirts and Actually Writing New Material" model. Couple that with a crazy strategy called "Setting Up an IRA and Actually Saving for Retirement Like Everyone Else" and they might be viable.
Of course, that assumes enough people want to see them play and buy their T-shirts that they can afford to save for requirement. If they can't, I suggest that they instead try the "Get a Real Damn Job Because No One Owes You The Right To Chase Your Dream If You Aren't Good Enough to Make A Living At It" model.
It doesn't hurt to be nice.