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Monday
Nov192012

Pandora: A Change in Priorities

pandoraSo you’re an independent recording artist, casting about everywhere you can for airplay and exposure. Pandora, the internet-radio service with the taste-smart music library, has just accepted one of your original recordings for rotation. Great, right? Pandora provides access to your music on one of the most talked-about music platforms out there. It’s a step in the right direction, a win.

Except it isn’t anymore.

Like a lot of music services, Pandora began as an artist-friendly start-up, armed with ideas about rewriting the dirty rulebook of commercial radio. Spawned by the Music Genome Project in 2000, it sought to broaden listening options, and to promote musical discovery by linking similar musical traits. In 2007, it accepted guidance on artist royalty payments from SoundExchange. And it remained, at that time, privately held.

A privately held company tends to focus on its mission, as mission is the foundation of its strategic plan and business objectives. When a company goes public, as Pandora did with a $100-million IPO in 2011, its priorities change.

pandora publicly tradedA publicly traded company can’t always afford a start-up’s idealism. Investors are focused on market performance, not artistic utopia. Every expense on a profit-and-loss statement — staff, facilities, research and development, artist and label royalties — is subject to review and reduction. When evaluating performance, investors value and protect a company’s mission most when it feeds financial success.

Enter the proposed Internet Radio Fairness Act (IRFA, H.R. 6480/S. 3609), enthusiastically supported by Pandora co-founder Tim Westergren. Despite the IRFA’s nod to “fairness,” the Act will, if enacted, reduce royalty payments to artists by more than 80 percent. Pandora supports the IRFA not because it sees the existing royalty structure as unfair, but because it sees the structure as insufficiently profitable for its particular business.

This is hardly complicated or surprising, but Pandora is no longer promoting economic opportunity for artists. Instead it is preying on them. It recently sued the American Society of Composers, Authors and Publishers (ASCAP) to reduce the royalties the performing rights organization collects for artists. Why? Because Pandora doesn’t like artists having a say in the rates at which they’re paid.

There can be little doubt now that artist royalties have been targeted as revenue by music-streaming services. Just as the major labels have traditionally left crumbs to artists, technology companies, many of whom are not even involved in the work of creating music, are now trying to bleed artists by undercutting royalties. Pandora is casting the artist not as its partner in distribution, but as its adversary.

As Westergren wrote recently, “Making performance fees fair for internet radio will drive massive investment in the space, accelerating the growth of the overall sector, and just as importantly accelerating the development of new technology that leverages the incredible power of the internet to build and activate new audiences. That’s where the great opportunity lies in the long run.”

What part of that is about music and artists?

Don’t be fooled by Pandora’s calls to support IRFA — unless, of course, you think the growth of music-streaming services is more important than music.

Which side are you on? Leave it in the comments below.   

Mark Doyon is principal and creative director of Wampus Multimedia, a record label, publishing imprint, and creative branding agency based in the Washington, D.C. area.

Reader Comments (6)

There also that bit of anti-competative and free speech for those that care about such things....


SEC. 5. PROMOTION OF A COMPETITIVE MARKETPLACE. (a) Limitation Of Antitrust Exemptions.—
(1) EPHEMERAL RECORDINGS.—Section 112(e)(2) of title 17, United States Code, is amended—
(A) by inserting “, on a nonexclusive basis,” after “common agents”; and
(B) by adding at the end the following: “Nothing in this paragraph shall be construed to permit any copyright owners of sound recordings acting jointly, or any common agent or collective representing such copyright owners, to take any action that would prohibit, interfere with, or impede direct licensing by copyright owners of sound recordings in competition with licensing by any common agent or collective, and any such action that affects interstate commerce shall be deemed a contract, combination or conspiracy in restraint of trade in violation of section 1 of the Sherman Act (15 U.S.C. 1).”.
(2) DIGITAL SOUND RECORDING PERFORMANCES.—Section 114(e) of title 17, United States Code, is amended by adding at the end the following:
“(3) Nothing in this subsection shall be construed to permit any copyright owners of sound recordings acting jointly, or any common agent or collective representing such copyright owners, to take any action that would prohibit, interfere with, or impede direct licensing by copyright owners of sound recordings in competition with licensing by any common agent or collective, and any such action that affects interstate commerce shall be deemed a contract, combination or conspiracy in restraint of trade in violation of section 1 of the Sherman Act (15 U.S.C. 1).

November 19 | Unregistered CommenterIndieMinded

As an independent artist who is striving to build an audience primarily via the internet I had once considered that service, but now I don't and I won't. I am on the side of the 125 major artists who have joined together to oppose this so-called "fair" doublespeak. I am extraordinarily small, and have none of the success of the brave 125, but I'm going to be brave to, and add my resistance to that which is bad for all artist the world over.

November 19 | Unregistered CommenterMichael Tyrone Boyd

This sounds like Pandora and other digital distributors would like to be the tail wagging the dog.

November 20 | Unregistered CommenterDavid Farner

Screw Pandora.

November 20 | Unregistered CommenterNoah Peterson

Hey, Michael. Can you say more or provide a link for the 125 artists opposing Pandora.
As an Indie artist who just recently released my latest CD, I find this news very frustrating and tragic.

November 25 | Unregistered CommenterAngie Kopshy

Is Pandora underpaying songwriters? http://www.digitalmusicnews.com/permalink/2012/121124inconvenient

November 26 | Unregistered Commentersteve gordon

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