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."

Comments

"Rights Holders"?

[The Rizz]

So, does the money actually go to the artists, or just to the publishing companies?

Irrelevant statistics much?

[guruevi]

The amount they pay out to the artist per stream is irrelevant if you don't know how much streams, how much revenue and how much other costs they incur.

If they pay $0.1/stream to the 'rights holders' and $0.001 to the artist, then that is a contractual issue between the artist and the rights holders. If Pandora pays $1M upfront to a label company to stream their library and then additionally pays $0.001 to the artist/stream and Spotify pays nothing to a label company but pays $0.006 to the label company who then gives 1% to the artist, then which approach gets the artist more money?

Add it up

[halivar]

A tenth of a penny per stream, times how many people for whose Pandora channels it appears, times how many times it gets repeated on that channel over the year? I would think the artist eventually comes out on top of what they'd make off the same song being sold for 99 cents on iTunes. Key point: it's not a royalty per song; it's a royalty per listen.

Re:How does this compare to radio?

[gl4ss]

ah but there is a system of paying per radio play regardless, usually the fee is based on potential listeners.

not the whole world works like USA as well, in smaller countries being on permanent radio playlist basis can pay the upkeep for an artist(of course there's just so many minutes in a day, so that is going to be a handful of artists)

pandora and other radio streaming kind of personalized sites work like they do because it makes the royalties cheaper than if the user could choose to play the same song again and again.

Re:"Fairness"

[GameboyRMH]

There's no such thing as "fairness" - it's a fairy tale concept that causes humans far too much suffering.

Funny, that's what I think about denying that fairness is possible.

On demand vs. random

[tepples]

I wonder if labels let Pandora get away with such low payouts because Pandora doesn't give the user quite the same control as the premium services. Unlike Spotify, which lets users construct a playlist, Pandora randomly chooses songs similar in style to the chosen artist's songs. Its approach appears to comply with the "noninteractive" requirement of the U.S. compulsory license, not allowing the user to select individual songs, and the "performance complement" requirement, playing no more than four songs by the chosen artist in three hours.

Radio streams a million listeners, Pandora to one

[Overzeetop]

BUT radio plays that song to millions of devices simultaneously, whereas P & S play to a single device. If it's listens we're worried about (and that is what this is about), it would take Pandora 5.7 years for a million people to consecutively listen to that 3 minute Lady Gaga, but radio can distribute the same amount of listens in just 3 minutes.

Re:Artists paid 16 times as much for Spotify than

[anagama]

This is true. When I was a kid in the 80s (teen years), I bought lots of records and CDs. By my late 20s (late 90s), that had dwindled considerably, more so in my 30s, and now that I'm in my late 40s, I basically buy no music. Maybe a song per year on average, if that much. I don't engage in filesharing.

So the $30 or $40 I spend per year on Pandora for an ad free account, which I use probably less than 10 hours per month, is comprised in part of money I would never have given the music industry in the absence of something like Pandora. Note, it isn't that Pandora caused me stop buying music -- I had already stopped more than a decade before I started listening to Pandora. For the music industry, whatever they get out of my Pandora usage should be considered pure gravy that they wouldn't have gotten if Pandora or something like it did not exist.