Pandora's Fed Up With The Lies The RIAA Has Been Spreading About It: Presents Some Facts
from the let's-rethink-this dept
We've pointed out that, recently, the RIAA and various front groups and attack-for-hire firms that it funds have been really turning up the attacks on Pandora, the hugely successful internet service that already pays significantly more in royalties than pretty much anyone else out there. This strategy is very much in the RIAA's tradition of attacking any successful internet company in the belief that 100% of the benefits of any successful internet company should flow to the RIAA.In this case, the RIAA and its front groups have done a masterful job of misleading a group of artists into parroting RIAA talking points pretending that Pandora's royalties are too low, not too high. Most of these claims are based on a either base ignorance, or conscious deception, often focused on comparing apples to oranges. In some cases, this involves comparing totally different businesses (like Pandora to retailers), or, at times, it means comparing Pandora's "per play" royalties to the "per play" royalties of other services like terrestrial radio or satellite radio. Of course, that's insanely misleading, because the real metric is never "per play," but per listener. With Pandora, a single play is to a single listener (or, possibly a few people in a room or a car). But, terrestrial and satellite radio plays are broadcast, meaning that they usually have tens or even hundreds of thousands of listeners per play. Comparing "per play" rates is just a really dumb metric. There's a separate issue in terms of how some have misrepresented the various payments, implying that Pandora's payments are much, much lower than they really are -- something that an eager media picked up on without even the slightest bit of fact checking.
It would appear that Pandora has finally had enough of the smear campaign and the attacks and has posted a detailed response to these attacks, highlighting how wrong almost every talking point has been concerning Pandora, and how this level of dialogue has done a lot more harm than good.
The first falsehood being disseminated is that Pandora is seeking to reduce artist royalties by 85%. That is a lie manufactured by the RIAA and promoted by their hired guns to mislead and agitate the artist community. We have never, nor would we ever advocate such a thing. I challenge the RIAA to identify a statement from Pandora that says we seek to reduce royalties by 85%. On the contrary, all of the key principals including Cary Sherman (the head of the RIAA) and Mike Huppe (the head of SoundExchange) know that we have been advocating for solutions that would grow total payments to artists. The 85% sound bite preys upon the natural suspicions of the artist community, but it is simply untrue. And although we compete directly with AM/FM radio, which pays zero performance royalties, we have always supported fair compensation to artists.It has also hit back on the claim that Pandora has been seeking to cut songwriter fees, explaining that it had come to a direct agreement with ASCAP on higher fees, and then ASCAP went back on the agreement and started playing games -- such as withdrawing tracks, but refusing to tell Pandora which tracks, such that it risked huge statutory fines if it played the wrong tracks. For all of ASCAP's claims that it is protecting artists, the reality looks like it was harming artists' best interests in trying to kill Pandora:
The next issue concerns the publishing side. Historically, Pandora has paid essentially the same rate as all other forms of radio, a rate established unilaterally by the performing rights organizations, ASCAP and BMI, in the late 1990s. In November of last year, following a lengthy negotiation, Pandora agreed with ASCAP to a new rate, an increase over the prior amount, and shook hands with ASCAP management. Not only was our hand-shake agreement rejected by the ASCAP board, but shortly thereafter we were subjected to a steady stream of “withdrawals” by major publishers from ASCAP and BMI seeking to negotiate separate and higher rates with Pandora, and only Pandora. This move caused us to seek the protection of the rate, also recently negotiated, enjoyed by the online radio streams of broadcast radio companies. It’s important to note that these streams represent 96% of the Internet radio listening hours among the top 20 services outside of Pandora (talk about an un-level playing field). We did not enter this period looking for a lower rate – we agreed to a higher rate. But in a sad irony, the actions of a few small, but powerful publishers seeking to gain advantage for themselves has caused all songwriters’ royalties to go down. Any characterization of Pandora as being out to cut publishing rates flies in the face of the facts.And, amazingly, the RIAA and others have been successful in spinning this, falsely, into saying that Pandora was looking to cut back on what it paid songwriters.
The depths to which the RIAA has sunk in its attacks on Pandora are really quite despicable, but it's par for the course for them. Anything successful in the music space created "outside" the record labels is bad and somehow "building on the backs of our copyrights." They won't rest until they've killed each off. The past decade and a half are littered with the remains of internet and tech companies who built great products in the music space that fans loved, each one systematically killed by the major record labels and the RIAA, who demand ever higher royalties.
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Filed Under: internet radio, lobbying, music royalties, royalties, songwriters
Companies: musicfirst, pandora, riaa
Reader Comments
The First Word
“This is why the RIAA is attacking Pandora. They put indie and unknown artists on equal ground as RIAA artists. The RIAA can't control who gets played the way they do on radio, and therefore can't leverage themselves as gatekeepers.
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In any case I'm protesting with the absence of money from my wallet for these morons as much as I can.
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You're either on the side of musicians or on the side with a tech company in this one. Pretty clear which douchey choice most of the people here will make.
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Funny how that sentence works for both agencies, no?
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It would then be funny if Kool-Aid sued for trademark infringement, proving our point, though this would be a case of fair use.
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No, most of them are failures (financially, at least). It's only a very few RIAA musicians that are astonishingly successful.
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So how much does Pandora pay per million plays?
Pandora isn't "transparent" on its revenues, nor presents any figures in absolute numbers, so all Mike has is, as usual, his biased assumption that it's put out "facts".
And again, without the songs Pandora has nothing to sell! I'm definitely not siding with internetty grifters over those who do all the actual work to produce music -- even if the latter get too much.
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2. at no point did filesharers enter into an agreement twith the artists to pay them royalties, the RIAA did
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Regarding your 'without songs Pandora has nothing to sell' bit, while that's correct(sorta, Pandora could always air non-label music), you miss the opposite side, where 'without someone playing their music, the labels have no one to buy', as a song/artist that no one knows about is one that's not going to be getting many buyers, so Pandora and services like it are anything but 'grifters', as without them sales would be a fraction of what they are now.
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Re: Re: So how much does Pandora pay per million plays?
"Mike is always wrong". That's his angle.
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What about the OTA radio stations? Are they 'grifters' like Pandora? How is Pandora anything more than an online radio station? They play a song of a certain genre on a certain channel and provide advertising to pay for their expenses.
Please explain why are they OK but Pandora isn't?
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No one, besides politicians, take the RIAA seriously. If Pandora wants to be taken seriously by these stupid politicians it must do like the RIAA and offer them something in return, like campaign contributions and revolving door favors. Otherwise how are politicians supposed to get and keep jobs when no one in the private sector would hire them.
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Strange math
http://thetrichordist.com/2013/06/24/my-song-got-played-on-pandora-1-million-times-and-al l-i-got-was-16-89-less-than-what-i-make-from-a-single-t-shirt-sale/
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Re: Strange math
Nigel
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Re: Strange math
Your song was played to 1,159,000 times on Pandora (individual plays). This paid him $16.89 or 1.457 cents/1,000 times, but each play is only listened to by one listener
On Sirius it was played 179 times (to an unknown amount of listeners), paying you $181.04 or 101.14 cents/time. 69,416 times as much as Pandora. But to put it another way, if the average play on Sirius had more than 69,417 listeners, you were being stiffed by Sirius.
On terrestrial radio it was played 18,797 times (to an unknown amount of listeners), paying him $1,373.78 or 7.31 cents/time. This is 5,016 times as much as Pandora, but only 7.2% of what Sirius pays you. But here the average play only has to have 5,017 listeners for terrestrial radio to be stiffing you.
Now, since both Sirius XM and terrestrial radio are broadcasts, targeting multiple listeners at once, I’m not entirely certain that Pandora is cheating you out of anything – and it’s interesting that you’re not complaining about terrestrial radio only paying you a fraction of what Sirius pays you.
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Re: Strange math
http://theunderstatement.com/post/53867665082/pandora-pays-far-more-than-16-dollars
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Re: Strange math
More dirt on the guy:
The crux of his methodology:
http://www.techdirt.com/articles/20120220/00310917802/if-youre-going-to-compare-old-mu sic-biz-model-with-new-music-biz-model-least-make-some-sense.shtml
Mike Masnick is known for having a bias so hear a music tech industry insider:
http://www.techdirt.com/articles/20120625/01011219455/some-facts-insights-into-whole-discu ssion-ethics-music-business-models.shtml
Oh and a few more people:
http://www.techdirt.com/articles/20120625/01250519456/free-culture-is-response-to-ethical-f ailings-old-entertainment-industry.shtml
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1.5 million listens in 6 months got Zoe Keating ~$1600. So there's some math for ya.
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This is why the RIAA is attacking Pandora. They put indie and unknown artists on equal ground as RIAA artists. The RIAA can't control who gets played the way they do on radio, and therefore can't leverage themselves as gatekeepers.
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Pandora is great advertising
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Two reasons:
2. How many of those songs/musicians were label signed? Pandora plays both label and non-label artists, apparently without any real focus on one or the other, and given the labels only get money from musicians signed to them, that's a lot of competition they're having to deal with.
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Do they still do this? I have been increasingly interested in Pandora since I've learned that they cover indies (I avoid RIAA member music to the greatest degree that I can).
However, this sort of thing would be a complete dealbreaker.
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missing the point
In the 80s, you wanted to hear a track, you went and bought it in a record shop. Netting the artist approx. 15% of the dealer cost of the record. The number of times that record was then played- 1, 10, 1000 times, is immaterial. To have 'on demand' access to that track, you had to buy it.
Pandora and Spotify can go and fuck themselves.
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In 2013, I still do this.
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Aside from that- the activities of one 'dude typing on the internet' have no bearing on my point, which I can rephrase, just for you.
"in the 80s if you wanted a track, you had to go and buy it* apart from lame ass trolls typing from their moms basement, who did and still get cds out of the library
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Re: Re: Re: missing the point
You do realise of course that the RIAA and BPI represent less than 50% of the entire music industry. And their position in the industry is only really about making plastic disks (the phonographic in BPI means vinyl as does the record in RIAA).
The RIAA and BPI can go fuck themselves not spotify and pandora that are actually a saving grace for the artists.
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In the 80's if you wanted a track you had to listen to the radio with a tape deck and record the song you wanted to hear on a blank cassette. You then shared this tape with your friends ensuring they didn't have to pay for it either, because, you know, we were kids and couldn't afford to pay for it even if we wanted to. And that is single-handedly why music doesn't exist anymore because home taping actually did kill it... oh wait...
Pandora and Spotify give the artists something from people that would otherwise be giving them nothing in many cases. This is progress in the right direction, and if you can't see that then I don't know what to tell you.
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Repeating a lie by tagging a stupid insult on to the end does not make it true.
Do you want to address real history, or are you going to be one of these fools who degenerates into kindergarten mentality when their mistaken assumptions are challenged.
Oh, and won't people learn the definition of "troll"? It's not "someone who dared to disagree with me".
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Re: missing the point
As the saying goes, 'adapt of die', the world has moved on, and if labels and musicians think that people are still going to pay for an entire album to have access to one or two songs on it, they are greatly mistaken.
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Re: missing the point
That's not how Pandora works (it is how Spotify works, though).
In the 80s, you wanted to hear a track, you went and bought it in a record shop. Netting the artist approx. 15% of the dealer cost of the record. The number of times that record was then played- 1, 10, 1000 times, is immaterial. To have 'on demand' access to that track, you had to buy it.
And, because of that, think how many people never ever bothered, and how many artists who fans would have liked, never got a dime and were never listened to at all.
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I also like to think of all of the mix tapes and bootlegs that were so often traded or copied in those days. Money may not have been made, but exposure has its own benefits.
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Ok, how many?
Go ahead, tell me exactly how many.
Music did just fine before the internet. And it was music people reaping the monetary benefit, not dorky tech robber barons.
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Re: Re: Re: missing the point
If you mean "music people" as in redord lable executives, then yes.
If you mean musicians, then not so much. From what I have gleaned from the history of recording contracts, less than 1% ever recouped their advances on album sales.
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I meant "record label executives" up there.
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Re: Re: Re: missing the point
The few artists who managed to get a record deal got wider exposure and maybe made some money, but the bulk of musicians were limited to local gigs.
With the Internet many more musicians are getting exposure, and making some money without having to sell their soul to the labels.
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Re: Re: Re: missing the point
I notice you didn't say 'musicians', could that be due to the fact that prior to the internet the vast majority of them didn't stand a chance of being known and making money unless they signed away their music to a label, and even then the vast majority of them still weren't able to make a living off of it?
Labels on the other hand were making a killing in that gatekeeper role they cherished so much, the one that is being threatened by those 'tech robber barons' opening up the playing field and giving everyone the chance to become, if not famous, at least well known enough to make decent money, and all without signing their rights away.
Summed up
Pre-internet: Great for gatekeepers like labels, crap for almost all musicians.
Post-internet: Crap for gatekeepers like labels, great for almost all musicians and those that enable them.
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Re: Re: Re: missing the point
You mean approximately 2% of people who wanted to be musicians were able to do "fine" before the internet. Most were unable to do anything and get signed and made nothing. Meanwhile, of those who got signed approximately 10% ever actually recouped whatever advance they made and could be seen as a success. So, I don't think that was "just fine" for most musicians who were basically unable to make money.
Today, a LOT more can make some money, and a larger number of indie artists are making a living than ever before.
So, the old system worked fine for the major labels. For actual artists? Not so much.
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There was absolutely nothing "just fine" about the music industry prior to the Internet. It was a horrible cesspool where even gold-record artists made next to nothing, and consumers had almost no choices whatsoever.
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Re: missing the point
If you don't have Pandora or Spotify, and you want to listen to music, you search for a torrent of it and download it. Artist gets no money directly.
Pandora significantly lowered my music piracy rate. Spotify has nearly completely killed it. I now spend $120 a year on music - more than I spent when I was buying CDs in the 90s before P2P sharing.
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Re: missing the point
In the 80's when me and my friends wanted an album one of us bought it and we all recorded it onto 120 minute cassettes tapes.
We needed the cassettes for our cars anyways and the quality of a home recorded cassette was about 1000 times better than the manufactured ones which stretched and started making squealing noises after about 25 plays.
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Re: Re: missing the point
I've got over a 1000 Maxells to prove it.
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Re: missing the point
Thanks for your input dude typing on the internet. Let us all know when you've caught up with 2013.
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Yes, that's why the Beatles have been poverty stricken since they stopped touring in 1966.
Oh wait...
You're an imbecile.
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Re: Re: Re: missing the point
Troll script #3, if I'm not mistaken. Don't you guys have new material, or at least the occasional desire to debate facts?
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You have to admit though, it is kinda funny when you think about it, how those that are so desperate to defend 'how things were' with the same handful of debunked claims, end up repeating them so often that they sound like broken records. Fitting really.
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Re: Re: Re: missing the point
Wow, you must be a farmer based on your ability to cherry pick.
Your sample doesn't represent the entire situation. How about factoring in the other 99.99999999% of "artists".
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Re: missing the point
So? IF is an operative word here, since the RIAA is insistant on making sure nobody outside the US can use Pandora. With Spotify, you know what that fraction of a cent is? MORE than the artist would often get. One thing that dumbasses who attack Spotify forget is that many people use it to play tracks *they already own* (netting more money than they're actually entitled to). Another is that they're not mutually exclusive (yes, people who use Spotify ALSO buy albums, and often use it as a preview to see if an album/concert ticket is worth buying). Personal example: while waiting for Muse to play in Barcelona a couple of weeks ago, I spent hours streaming their songs through Spotify - including the 5 albums of theirs I have already bought. They got money for this, and Spotify is somehow evil for allowing this. if Spotify didn't exist, Muse's additional revenue? Exactly $0.
Stop applying widely debunked assumptions to the way people use services - you're basing everything on lies if you do.
"In the 80s, you wanted to hear a track, you went and bought it in a record shop."
No, if I wanted to hear a track, I taped it from the radio, borrowed it from a friend or just didn't bother. I might borrow a copy from the library, buy second hand or get one of those tapes going round school that I could copy. I might not bother listening at all except if it came on the radio while I happened to be listening. Sometimes I'd buy, but it was a long way from the only choice.
I wish people would stop rewriting history to pretend that the past was this glorious fantasy world where every listen was paid for directly and every artist was paid according to what was listened to. Because it sure as hell wasn't.
"Pandora and Spotify can go and fuck themselves."
Why does every detractor have to have the intellectual maturity of a school child?
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Re: missing the point
So lets get this straight, if an artist across all sales of his albums ends up getting 0.0001 of a cent (or something) per play of the songs those albums over time that's immaterial because you used to have to buy the album instead of stream it to provide that revenue to the artist?
Using very general numbers a band could actually only end up seeing $1.25 from an album sale, across 10 tracks that's 0.125 per track. It really doesn't take that many listens over a lifetime of ownership for that to get down to the same scale as the spotify you are raging about. They are not comparable of course which is the irony of you calling the per play immaterial when you just compared a sale to a single stream cost but whatever.
But lets talk about radio, in fact why don't you go and read the blog that was linked by the pandora one. Go on, I'll wait.
http://theunderstatement.com/post/53867665082/pandora-pays-far-more-than-16-dollars
Base d on Lowery’s own numbers AM/FM paid him $1,373.78 for 18,797 spins or 7.3 cents per play. Much higher than 0.0001 but only 70,000 people need to have been listening for it to be pretty much the same. As the blog points out the radio station Pandora just brought manages 18,000 average so if you think that is unattainable by a large nation station you are... weird, frankly. Popular radio shows are listened to in the millions. And this is before we even talk about caps.
You may want to brush that under the carpet as "immaterial" because it's not on demand but under the old label system that on demand 'premium' for artists is even significantly more.
In this day and age there is no question that buying a track directly from an artist via a service like band camp is one of the best thing you can do support that artist. The thing is that the people who want to support you in that way will regardless of if they can stream you and what streaming is doing is providing you a comparable per listen income to radio and even sales and that income is coming from people who may never have been montaised in the same way. This is before we even consider the value of streaming as advertising to grow the fan base who will buy your songs and merch and come to your shows and how streaming is vastly more egalitarian. There are many bands I know who have their songs on streaming services that will likely never, ever, see radio play.
So what have we learned? Per listener radio likely pays vastly less per spin in terms of people listening to that spin and this is purely when we are talking about songwriting royalties vs songwriting royalties because US radio doesn't actually pay performance ones and only for artists big enough to played on radio in the first place. That under the label system artists barely saw a real premium for "on demand access" in the first place and in the new world they can both expand their core fan base and make money from people they may never have made money from otherwise.
But nah, lets just listen to the people representing a dying business model based on charging tolls for passing through a centralised system under their control in a world that has distributed that system and power among the people who actually use it. Nothing can possi-bligh go wrong.
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*Isn't even
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