Why sign up for a system which provides almost no return?
ETA: Sorry, the first line was a "couldn't resist", presented (badly) as just raising another popular meme and invoking discussion of the conflict thereof.
The second line refers to the fact that somewhere he signed a release whereby (however obtuse, obfuscated, and nigh unto unavoidable) such financial abuse was consented to. In comparison, consider how schools are offering near-free degrees (real ones, like MIT) in retaliation to exorbitant student debt, and doctors & patients are opting out of the hideous costs of government-run healthcare by returning to cash & subscriptions (I don't mean to provoke arguments over those, just as points of comparison). Somewhere, somehow, alternatives exist where real payment is demanded and he actually would get paid (and no I don't mean "make money performing", as some music just isn't per se).
Sure you can. Don't publish through traditional channels, retain your own copyrights and masters. Sell vinyl out of the back of your van at gigs. Plenty of underground acts have paid rent that way.
Yes, you can. Even if you are on a traditional label. Compulsory license covers, well, covers, not the original master recording. Before you make any counter-argument, consider the Beatles, Led Zeppelin, and AC/DC, which are not featured on any of the legal stream services.
Yeah - they can pretty much play anything they want and only have to pay the artist if they go through the motions to register with them. It seems like quite the racket to me.
I believe music is more than "information", when I buy an album, I'm not buying the sheet music but the recorded of someone more talented than myself performing that music.
How do you apply "information wants to be free" to music like this?
I'm asking what makes sheet music any more information than recorded music. Are you trying to say that I'm somehow calling an airport restroom, a freshly cut flower, and a brand new car information? Or are you just disqualifying me from the conversation as a rhetorical trick to avoid answering a simple, straightforward question?
I thought I detected you heading in that direction. Yes, people do try to make that argument.
Sheet music is like an instruction manual. Follow the instructions, you can make something. I consider instructions to be information. Recorded music, on the other hand, is a performance. A performance is art, while sheet music describes art?
I don't have technical definitions, this is just how I see it.
I'm saying that a recording of a band performing a song IS more than information, there's the added value of someone performing that deserves compensation.
Nothing and I never claimed that it does? I disagree with the whole "information wants to be free" rhetoric in regards to music in this specific context.
Yes an MP3 is literally and pedantically information, however it also has an additional worth to me that I find rewarding to pay for. I believe people who enjoy music but use this argument to acquire it for free are deluding themselves.
How do you apply "information wants to be free" to music like this?
How do you differentiate? An .MP3 is just another data file, trivially copied, with the added downside that government has decreed that under certain common circumstances anyone can play it while paying him less than a pittance for it. I'm not advocating this view, just noting the painful reality thereof.
I meant it more as a personal question to people who say this. If an artist's music has value to someone, I'm curious what sort of mental gymnastics they perform to believe "All information wants to be free; therefore I will acquire this music for free."
It's always struck me as just a way to absolve yourself of guilt for pirating music.
I think the real phrase should be "Information is just information, people want it to be free."
Exactly. To really be fair you need to compare the audience for each play, and for Pandora/Spotify it's just one person per play versus X (hundred/thousand) for regular radio.
Looks like the answer is probably "thousands" [1] of listeners per radio station. The back-of-the-envelope is that the top station will have 1% of its metro area listening at a time (metro areas as defined here [2]).
Even the 100th largest metro area would typically have 5k people listening to a play of a track.
If you assume 5000 people listening per play at 18797 plays, and then calculate a cost PER LISTENER (at $1373.78 royalties paid) you end up with $0.014617 royalty per 1000 "performances" of the song (counting every listener's radio as a "performance"). AND, when you multiply that back out with the number of "performances" on Pandora, you get....$16.94.
Considering WAY more people probably heard the song on the radio, possibly by a factor of 5 or more, this is a HIGH estimate; actually doing the math would likely come out with a much lower equivalence, but it's the right order of magnitude.
I am all about protecting artists rights to earn, and for buying music that I'm listening to. As the parallel comment by smack_fu mentions, though, this is really about the insignificance of the Pandora market size more than anything else. That and the inability of a particular blogging artist to do enough basic math to realize the royalty per performance is higher on Pandora than it is on the radio.
If you follow the links he provides they have actual market data on how many listeners any given radio station has, so his numbers have that behind it. Also, it's not that 1% of people listen to a popular radio station 24 hours a day, it's that at any given point in time, an average of 1% of the population are tuned in to that station.
I'd say the Pandora 1 track per customer is a safe assumption. Sure, I've known cafes and dinner parties where Pandora was streaming to multiple people at once, but I've also known lots of friends who have Pandora playing on their headphones even when their headphones aren't on their heads. Nobody I know who uses Pandora actively pauses it every time they leave their computers, so I expect it washes out in the end.
You can generalize my point: Pandora should be judged the same way as radio or the comparison is unfair.
The methodology of arbitron says that if radio can be identified within audio range, you are deemed to be 'listening' to it.
Can we still claim, by this methodology, that every Pandora device has an average of one listener? Only if you claim every radio has an average of one listener by this methodology as well (which is highly doubtful) or if radio and Pandora are used significantly differently (which I don't strongly believe: as you say, it's played in cafes in place of radio).
> if radio and Pandora are used significantly differently (which I don't strongly believe: as you say, it's played in cafes in place of radio).
I have to disagree: I think the vast majority of people listening to Pandora are doing it on their laptop on headphones, while many radios (today) are not being listened to by a single listener.
Regardless, the estimates I used intentionally underestimated the Arbitron radio audience numbers by an order of magnitude. Some of the larger markets go up to 150k listeners on the top station. If you're right and significantly more than 1.0 people listen to a particular Pandora stream on average, then it still have to be more than about 5-10 listeners per instance before it hits the numbers that radio is claiming. And I would be very, very surprised if the average were anywhere near that high. I think if Pandora had evidence of that, they would be able to demand more money from advertisers, for one thing.
As to the methodology of Arbitron: Not really relevant for my purposes, because I think that it's accepted by advertisers as reasonable. At some point, if the numbers were complete garbage, the advertisers would have noticed and stopped relying on them; advertisers certainly track the results of their campaigns, after all.
My argument is trying to judge Pandora in the same way as radio, in that the number of plays as counted on Pandora reaches far less people than the number of plays as counted on radio. What the artist wants is to be paid for every person that listens to their song right?
So when you say "Only if you claim every radio has an average of one listener by this methodology as well", I think you misunderstand the core problem, which is that the article compares stats that aren't equivalent.
The issue is in how these listens are counted. So yes, you can pretty much claim every Pandora device has an average of one listener. Users of Pandora have their own personalized streams, and every time a song is played on a person's stream, it's counted as 1 play, and is heard by 1 person.
In contrast, radio stations have one stream that many many people listen to. When a radio station broadcasts a song once it's counted as 1 play even though that song is received by X radio-receivers and heard by X people (where X is the reach that station has, for example, 150k).
The issue is the article compares plays on Pandora (where each play as counted reaches 1 listener on average) to plays on radio (where each play as counted reaches upwards of 150k listeners).
No, they shouldn't, because you and I can be both listening to Pandora without hearing the same song. If Pandora played the same songs to everyone, it wouldn't be as popular because people wouldn't hear the music they like.
How many more times is this bullshit argument going to be offered up by people who wouldn't be caught dead listening to the radio for this very reason?
The artist is complaining that Pandora pays a low royalty rate, and to make this claim they compare to FM/AM radio and Sirius XM royalties. However one "play" on radio or Sirius is equivalent to at least several thousand "plays" on Pandora, as there are many people listening to the radio station (and hence the song) at the same time, while with Pandora it is generally only one or two people listening at a time. So what you really want to compare are the "per listener" royalty rates, which appear to be pretty similar. Say 5000 station listeners * 18797 radio plays = 94M "pandora equivalent plays". If you compare these adjusted play counts to the royalty amounts, radio only pays 30% higher, not 100 times higher.
One could make the argument that a Pandora listener should be worth more, as they are choosing to listen to the personalized Pandora station rather than more forcibly listening to whatever the radio DJ puts on. However, the whole debate is obviously not as clear as the OP wishes it to be.
One could make the argument that a Pandora listener should be worth more, as they are choosing to listen to the personalized Pandora station rather than more forcibly listening to whatever the radio DJ puts on.
Is that not the whole point of Pandora? If it was the same as radio then what would be your incentive to use it?
Pandora and Spotify can do a lot more for bands by helping them plan tours, sell tickets to shows, and connect with fans. They could also help venues book and promote acts with known local followings.
There are hundreds of thousands of people who heard that song, like that type of music, and would consider attending a show and spending real money to get in. They might buy a tshirt too. Pandora could notify listeners when the shows come up, and help bands plan their tours to towns with more fans.
It could be real revenue for the bands, and for Pandora.
EDIT: Doesn't even mean a UI change, could be done with ad retargeting, or any performance marketing mechanism.
It's a real problem. There is no viable funnel through which to convert Pandora streams into transactions except the "Buy" dropdown (which I'd guess very few people click on - Pandora is often playing in the background in another tab).
Daisy (Beats by Dre's "Spotify") is trying to do this by partnering with Topspin and we shall see what happens - I'm excited to check it out.
The fact is, all-you-can-eat streaming platforms will never scale to the amount where payouts for plays are significant if they continue with the freemium model. Artists need the ability to sell other products and experiences to those listeners. I'm, admittedly, biased towards the idea that artists need to seek new direct-to-fan revenue streams.
I know the headphones that Dr. Dre puts out are among the worst available on the market. I've also heard that the mobile audio they provide affords a barely noticeable difference.
Yep, hate to say it, but you and me are in the minority here. For the average consumer, headphones are a social object. They want something that sounds decent (remember they are playing lofi files from their phones) but looks really cool (to them, and the people they are trying to appeal to, at least). Also, vast numbers of people buy Apple earbuds even though they don't own Apple devices!
That's all neither here nor there though, because Ian Rogers was never involved with the headphones - he was CEO of Topspin and is now running the development of the Beats music streaming platform.
I agree tying into the Beats by Dre brand is a negative for people like us, but for the demographic they are going after it will probably be better than building a brand from the ground up.
They are the worst, unless you're comparing them to the 5$ throw-away earphones you upgraded from. Unfortunately, this is the story for most of the owners of those ridiculously-priced headphones. Every time I see someone wearing those, I have to fight against this urge to explain them how terrible their headphones are.
This is idiotic. I have owned a pair of Beats. They were ok. Far from the best headphones I've had, but ok. I replaced them with 300 GBP's worth of headphones from Amazon that had a super-high rating. They're a bit better than ok, but I forget them at home recently, and had to use my old Beats. The world didn't end.
To talk about Beats being terrible - what planet are you on? Take your hipster snark elsewhere. Yes, they're primarily a fashion item. But are they dreadful headphones? No, the price just factors in their fashion status.
It's not about being hipster. I've spent years combining different headphones with different DACs and amps, to get a good sound, tried tens of devices with different use cases. Those use cases include being a fashion item as well. I respect that, though it doesn't matter for me unless it looks really bad. I also think the beats headphones don't even look that good. Add to that the terrible sound quality[1], it becomes a no-go. I mean it. It really is bad. Maybe your ears are not very sensitive (it's a possibility) or your source is bad but I find it impossible for someone not to notice at least the loss of detail when they compare beats to a proper pair of headphones.
My smart phone has a "Beats" option to enable when headphones are plugged in, (and oddly enough bluetooth) as far as I can tell it's simply acting as a pre-amp and upping the voltage.
That's pretty much correct. All the "Beats" setting does is adjust the equalizer in the phone, to emphasize base and treble more. It's the same thing that old stereos did with the "Loudness" button.
The sneaky thing is that when the Beats feature is turned off, the default equalizer is tuned so that bass and treble are deemphasized, to make the difference between the two even greater.
I follow someone on YouTube that did a really good review about Beats Audio. Here's the link if you're interested.
I also think that there's a really huge opportunity here for Big Data to make a Big Impact (excuse me for being cliche). See http://beluga.grooveshark.com for a good example. Imagine the possibilities of linking music consumption data with demographics/sales/tours/etc data to optimize A&R, tour routing, merchandise design, etc. AFAIK there aren't really any strong players in this space, and it presents a fantastic opportunity for someone to make a ton of money.
Incidentally, I'd imagine the same technology, methodologies, and infrastructure used for planning and optimizing shipping routes (first by UPS/FedEx, now Amazon) would be very applicable in this arena.
except a good portion of bands and venues are under the boot of ticketmaster/livenation who will never participate in any sort of profit sharing like this.
Exactly. If you want innovation to be a real force in music, you have to kill Ticketmaster/Livenation. As I've said before, that will be close to impossible for a startup to do, and the next real opportunity will be 2015 (when a lot of contracts wear out). Regardless, an entrepreneur would have to hit a grand slam to even have a chance against TM/LN.
Why is this? I've heard that TM basically has a monopoly on venue ticketing, but what are the barriers to entry for a startup?
Is it exclusivity contracts with all the big venues, or something similar for labels?
I would think a startup in this space would target smaller venues that aren't under contract, and independent artists to build traction, and if the product is truly superior they would have a good chance against the incumbents.
It's not just exclusivity contracts for the venues. LN literally owns those rooms. You can't get your ticketing solution in until you can afford to buy the venues!
And if LiveNation doesn't own the venue, they're probably your tour manager.
You can use Songkick[1] for that or Last.fm's Events section.
On the other hand, I've see Rdio promoting shows and pre-releases on their Twitter account.
Even the relatively simple app that I installed on top of Spotify that emails me when an artist I listen to regularly is playing near me has increased my live show attendance by a factor of 4-5.
would be interesting to compare pre-pandora days (prior to, say, amassing 100k plays for 'Low' in a quarter) to the current revenue generated for Cracker as a whole. I'm pretty sure pre streaming music days will win by a long shot. "How will musicians support all these tech startups?!" That's the question.
The author didn’t state that nobody buys his songs on iTunes. And just because Apple pays artists well, is that a justification for Spotify to pay peanuts? “I see you can pay your rent this month. Good, then you won’t be needing my money!”
His point, of course, is that Pandora should be viewed as a marketing channel, not a way to make money in itself. In the old days of Payola, this artist would have paid Pandora in order to be played on their stations. This is an improvement for the artist; he's just not seeing the big picture.
I think the point is that Pandora acts as a discovery app. It plays you something and you think "hey I like it, I'll go buy it on iTunes".
Now I have no reason to believe I am representative (and in fact I would be surprised if I was), but 60% of the music I have purchased in the last couple of years has been as a follow-up to a Pandora play. Another 35% has been following a Shazam tag from a radio station, and about 5% from a movie soundtrack or something like that. Of those, Pandora is the only one that causes me to buy albums instead of solely individual tracks, which is an order of magnitude more money.
So I know for a fact that N artists got money from me that they would have never gotten if not for Pandora. That doesn't help the (100-N) whose track played and I didn't buy them; but, you know, I actually didn't care enough to want to listen to them again. Or, Pandora played them while I had the computer on mute (played is not the same as listened).
Now the legitimate question is, how many people are like me, as opposed to people who use Pandora without buying anything at all as a result of what they hear? I don't know the answer to that question and I suspect neither does Pandora (they have a "buy" button so they can presumably track that, but I only sometimes use it rather than just independently look for the artist on iTunes some later time).
this reminded me of a guy who downloaded an audio book at piratebay, enjoyed it and then searched for it on amazon, to see what other books people bought with it. then downloaded those at shady sites too. but then, he usually donates to authors of software that he uses (e.g. Libre Office). Maybe we need an easier donation model for music. one that gives 99% of the money to the author/perfotmer
Not every musician wants to tour (often a very expensive venture), and even those who do can't cover 100% of the globe. Further there are so many streaming options now that actual purchases are becoming somewhat of a relic.
It is incredibly cheap to dictate the business models of others. Are you a software developer? How about you do that for free then and maybe you can do like training classes or something and you can make all of your money on that. I hear that's where the programming economy is going.
You realize that it was technology itself, in the first place, that allowed musicians to work hard for some months, and then get paid for a lifetime from the results.
You also realize that not-yet-established musicians would pay exorbitant amounts of money to merely get heard.
So, excuse me if I have little sympathy for the "plight" of the recording-only musician.
You have no idea what you're talking about; you're assuming everyone who ever had a recording contract made out like a bandit, based on the most successful 0.01% of recording artists.
Its not a norm, but it is now giving many people a chance to try.
If I have to compare, its synonymous with building a online presence with a blogging site. It won't earn you much and you won't buying yachts with that money. But the purpose of that blogging site is to get you some following and recognition in the community.
Then you need to go on and build something awesome that sells. That is playing the bigger game.
I didn't mean to suggest that this was the norm. It is, however, the system that you seem to want to defend. And it's a system that is an artifact of how technology used to work.
Making music is fun, social, and status enhancing. People are going to keep doing it, and doing it enthusiastically, whether it's possible to make money from recordings or not.
+SiriusXM plays "commercials" on channels where clearchannel has an interest (KISS, etc.) Clear channel was an early investor in XM to insulate them from the threat of satellite radio vs FM networks (which they own a large share of)
+Streaming networks like Pandora and Spotify actually pay more per stream then SiriusXM does because satellite radio pays the Terrestrial (FM/AM) radio rates.
+The Math on this is confusing because a Terrestrial (FM/AM) station might pay $50 royalty to play a song but 200,000 people listened to it when it was broadcast.
Music doesn't have the value it once did. End of story. Why are we dwelling on this? There isn't going to be a magic way to increase the value of music.
Does played mean someone listened to it in entirety? Otherwise it doesn't say much about the quality of your song. That is similar to claiming you have a million users without talking about engagement.
The song in question is Low, by Cracker. A song that placed 64 on the Billboard Hot 100. It was also on the soundtracks of movies like The Perks of Being a Wallflower.
> "Here’s an idea! Play two minutes of commercials and double your revenue!"
If they could actually sell two minutes of commercials, I'm pretty sure they would.
Expecting them to match the rates paid by massive existing media companies is essentially wishing the startups who finally got traction in this niche, back out of the picture and the entire market back to the business models and rate of technological progress that those massive existing players deem sufficiently non-threatening to their broadcast businesses.
I have sympathy for the author. I really do. But the problem ought not be simplified down to "Pandora should pay what Sirius pays".
(Though it makes me wonder what rates the larger tech companies are paying, now that they're making similar offerings.)
The most shocking revelation to me in this article is that Sirius XM plays 13 minutes of commercials per hour! I could have sworn one of their big selling points was that they're commerical-free.
Most of their music stations are commercial-free. The news/talk/entertainment/etc stations have tons of commercials, so perhaps it just averages out to 13 minutes/channel.
Pandora / Spotify are never going to be platforms that make musicians a living (I am happy this article is representing that fact to the rest of the public).
Performing Live / Selling Merchandise and doing other physical appearances is the only way you will ever make any money and even great artists who tour still can't make enough money to keep producing their art (their following just isn't big enough).
Would you work freelance on spec and only take money from clients if they were unconditionally happy and at any price they wanted? That is the argument you are asking artists to accept.
If you re-word it slightly to "How many of the people who listened to it through Pandora would (care to listen to your songs at all, if it wasn't for Pandora)" then it's more relevant, though not "the real question" to me. Though still kinda rudely worded.
Wow, that is so sad. One million plays is pretty crappy. Consider that there are 70M active subscribers [1] that means 1 in 7 of them may have listened to your song exactly once. And for the low price of $16.49 a million people have heard your song, where as before nobody had heard it.
Now go look at your iTunes sales, how many copies of that song have you sold? 10? 100? 1000? How many of those sales occurred because people heard your song on Pandora, who won't play specific songs on command, and so they wanted to hear it again on their time?
Back in the bad old payola days you would have paid much more than that just to have your song even on the freakin' radio. Because that was the cost of letting other people hear your music and come to the conclusion they wanted to buy it.
Not sure why people are voting you down. I'm pretty sure that it's common knowledge that artists, even in the old radio days, made their money on touring and often times ended up in the hole on album sales and radio play.
Um, this is an established band. This song is from 1993. It was pretty big at the time. That's why they still get thousands of dollars in radio revenue. That's why they aren't very impressed by the "exposure" or the $15 in payout.
The radio exposure is many many times more listens. They would be paid similarly if they got anywhere close to the same amount of exposure on Pandora (actually a lot more, Pandora pays a ton more than a radio station).
Is that the amount paid by Pandora, or the amount paid to the artist? I thought there was a lot of middle men taking percentage cuts in between Pandora and the artist.
It's only the amount paid to the artist. Pandora actually pays 12 cents per 100 plays meaning they pay $1200 for a million plays. So the middle men are apparently taking a huge cut. If I were a musician, I'd be more concerned about that.
If Pandora doubled what they pay out, that musician would still only make about $33. However, if that musician could get just 50% of what Pandora already pays out, said musician would get $600.
What this is missing is the amount of listeners each play counts for. On Pandora/Spotify/Youtube, a 'play' is typically one listener. For these, it's mainly worth noting that Spotify is about an order of magnitude more profitable per play ($1e-4 vs $1e-5).
Sirius is at ~$1/play, commercial radio is $0.07/play.
For Sirius XM, the breakeven number of listeners/play for the pricing structure to be comparable to Pandora is 70K. For Commercial Radio, the breakeven number of listeners/play is 5,000.
I don't mean to sound contentious.. but, uh, why is OP surprised? Music access quickly becoming a commodity. Pandora/Spotify do for music what Netflix did for movies. I mean, even Southpark did a show on this (viz. Blockbuster).
I'd say that the fact that the FM station paid OP 100x more than Pandora shows how hugely the FM/AM business models have failed and how for granted so many artists took being massively rich. Guess what, there are tons of talented people out there. Software is free, and everyone can compete. I'd say that's healthy. We're no longer stuck in the dark ages of information discovery (back when if something wasn't on the radio or on TV, no one had heard of it).
Also, ngoel36 said: "If your song stream convinced nobody to buy your song on iTunes or buy a ticket to your concerts, then you have bigger problems than Pandora."
This times a million. So your music is apparently awesome but you can't sell t-shirts or concert tickets (concerts are, after all, where the the real money is made).
"Why doesn’t Pandora get off the couch and get an actual business model instead of asking for a handout from congress and artists?"
OP is surprised because on conventional radio a single play can reach thousands of listeners earning you around a dollar. On Pandora, each play only reaches a single listener, so a million sounds like a lot.
As pointed out elsewhere, a "play" and a "play" here are wildly different. A radio "play" can involve several thousand people, while a Pandora "play" probably involves one or two persons.
I doubt it's even that - I used to use Last.fm for this, back when they offered that service, and I used it like... a radio! I.e., you leave it running as background music, and not necessarily bother turning it on/off everytime you leave the room or go shopping.
>I'd say that the fact that the FM station paid OP 100x more than Pandora shows how hugely the FM/AM business models have failed
Failed how? They have a business model that pays the artists a reasonable amount of money, while at the same time making a profit for the radio station.
>I don't mean to sound contentious.. but, uh, why is OP surprised? Music access quickly becoming a commodity.
Because people want to be in control of social life and have their say and not just leave it to blind forces (from Gods, to Father Stalin, to the Free Market, to technology).
You say "music is becoming a commodity" in the way people once said "It was the will of gods for you to die in the ripe old age of 30".
No, music is NOT becoming a commodity. Business players, regulations and what have you are MAKING music a commodity.If people want to reverse course, they always can.
FYI people, the author is David Lowery, lead singer/songwriter of Cracker. The song is "Low".
I like the song and you probably did too, if you ever heard it. It was used in The Perks of Being a Wallflower last year.
It does strike me that many people may be under 20 and this song might actually be older than they are. So I will assume the ignorance is genuine rather than flippant.
What? Why would you even consider that people were trying to be flippant (disrespectful?)? So what if people know or don't know the artist? Does its popularity demand some kind of instant respect for the authors argument?
I'm just confused by what you are trying to achieve with this post
Because a lot of the earlier comments seemed to think this guy was some disgruntled starving artist who had a million Pandora plays but no real success.
I don't mean to be heartless, but this makes sense to me.
By design, people aren't supposed to ean real revenue from their music on Pandora. It's more about exposure, isn't it?
I mean, the supply and demand of it doesn't work out in the artists' favor, only in Pandora's. No one can find your song or you specifically, so why would you have an opportunity to earn a lot of money? There's no demand for you or your work, just work in a certain genre that you might fulfill for a few minutes.
Again, I don't mean to be harsh, but it seems like it makes sense in Pandora's case. I think it would be more reasonable to expect some benefits to exposure and fame than expect revenue. Users aren't exactly incentivized to click that (admittedly tiny) buy button under the song.
Man I'm sick of hearing this particular complaint.
Let's look at the numbers. 1M plays for ~$42. Sounds like not much right? Wrong.
Yes AM/RM Radio paid ~$1500 but for 20,000 plays. Now ask yourself this question: how many people heard those 20,000 plays? If the rate of pay was the same ($42/1M) it would have to be 35.7M listens. Well, at 20,000 radio plays that averages 1800 people per listen. Is the likely audience higher or lower than this number? It's bound to be higher. So streaming services are in fact paying more (per listen per listener).
You may be sick of hearing the complaint, but the real problem is that the complainers are misinformed.
Sounds like Pandora needs to put real pressure on getting those reports revised to be clearer. It's unwise to be hated by the industry that you depend upon.
I don't think so. Pandora is much more narrowly tailored to the individual listener than radio, and radio is so corrupt that is' not a good model to start from in the first place.
I think part of what drives the complaint is that a song being on Spotify is much more valuable to the listener than it being on the radio. There's a spectrum of value ranging from the radio at the bottom (you are subject to the whims of the DJ on when and where you hear the song), to Pandora (you still aren't in complete control, but you have a lot of influence), to Spotify (you are in complete control as long as the song remains on Spotify), to owning the song on an album or as a DRM-free download (you are in complete control forever).
I think since Spotify is so much closer to owning an album than it is to radio, many artists expect it to be closer in value to album sales than radio plays.
Not saying ignorance of the proper comparison isn't happening, just that it might not be the only reason.
When I was a kid (Napster era) I paid for nothing. The artists weren't stream-able, so there were no royalties either. Today I buy every damn song I listen to, thousands of dollars worth. When an artist I like comes out with a new CD, I buy it immediately.
I don't use Spotify or Google Music. I don't know what they pay to the artist. What I do know is my friends that use them have zero reason to buy a CD. I also know even the more obscure stuff shows up on there. Once they are older and have a family, they certainly don't have time to go to more than a couple of concerts a year, and they most likely are not wearing band t-shirts past 30.
The way radio worked, you heard a song once and a while, liked it, most of the artist's other songs you rarely or never heard. There was a big incentive to buy the CD.
Musicians need to have a freemium model, where you get free, unrestricted access to some songs, and then if you absolutely love the band you pay for the rest (or you can pirate it, but there are a few hoops to jump through for that one.) It has to be convenient, on demand, and a single standard. May be its lossless audio, or may be its just mastered differently. Someone who knows more about music would have to figure it out.
Despite all of this, my favorite musicians regularly release new albums. There are a few duds, but the music is good. Countless genres blended together and mutated, with virtually unlimited choices. As far as I'm concerned, this is a music renaissance.
"Today I buy every damn song I listen to, thousands of dollars worth"
Why do you do this? You know that most of the money for an album doesn't go to the artist? Do you buy the physical CD or do you buy the song on iTunes?
The vast vast majority of people do not have thousands of dollars to spend on music.
I'm not sure what you're arguing against here. Is it a problem that he spent thousands on music? In the last 7 years I've spend circa $6,000 on one service alone (emusic). I used to spend $500+ per month on vinyl. Hell, I even steal it sometimes too.
I know that the money doesn't all go to the artists - what would you have me (or the GP) do instead, not pay for any of it?
That's disingenuous. How well would it scale for a musician to personally handle depositing checks from millions of fans? There is a very good reason that many musicians become involved with labels, promoters, distributors, etc., which is to free up the time of the artist to focus on what they are actually interested in doing: writing and playing music.
> How well would it scale for a musician to personally handle depositing checks from millions of fans?
Like many scaling problems, that's a good problem to have: at that point, you can afford to have people working for you depositing checks, which is pretty much the inverse of the power relationship artists have with labels.
> the inverse of the power relationship artists have with labels.
You don't know what the relationship with the label is. Some artists come in with their own label and only need distributor to reach a bigger audience (artists $$$/labels$$). Some come in completely unknown and the label has to front all the money (artists $ / label $$$$), and some are quite happy to be on a smaller label and let the label handle the business side of things.
> at that point, you can afford to have people working for you depositing checks
...and paying royalties for samples, collaborators, songwriters. Well now we have to hire a guy to handle all of this and you can either pay him/her a salary or a cut of the sales. Now we've slipped back into the label distributor problem.
>How well would it scale for a musician to personally handle depositing checks from millions of fans?
Many of them do a good job handling fan mail. It sounds like a nice problem to have.
>There is a very good reason that many musicians become involved with labels, promoters, distributors, etc.
There are some good reasons for artists to outsource administrative errands, management. There's also the crappy reason that is the monopolization of the major distribution channels.
> Why do you do this? You know that most of the money for an album doesn't go to the artist? Do you buy the physical CD or do you buy the song on iTunes?
You know that if you spend $0, the artist gets nothing, right? Then their label drops them because they aren't profitable.
I buy at least $30 of music each month from iTunes. Finding the addresses of these artists, writing a check and sending it their way would be more hassle than I care to go through.
If the artists don't like the deal that labels are giving them, they don't have to take it. They can build their own fan base, learn marketing, get exposure and sell their own stuff through iTunes and other places. A lot of artists are opting to do just that.
It's an interesting question. Do you have a moral resposibilty to make sure the money you spend makes it to the artist, or did you just justify your lack of moral effort by saying "well I 'paid' for it, meh..." and how might this be different that just paying a few bucks for a Pandora membership.
Why do you do this? You know that most of the money for an album doesn't go to the artist?
You don't know that, because you don't know what sort of music he listens to or what deals those artists have with their labels. There are certainly cases where labels fuck artists, but there are a lot of others where they deliver value. This idea of blaming all the big bad labels is little more than an excuse not to pay for music. Along the way, it's crushed lots of small independent labels that had great partnerships with their artists but get blamed for the perceived moral failings of the majors.
So why didn't those small independent labels ask their artists to come out swinging for them and champion their cause? Or better, why didn't the artists who (apparently) loved their labels advocate for them in the greater public media?
If it's on the radio I believe I can record it and play it at my leisure - as a 12 year old with a budget of $0, this is how I obtained most of my music. Has time shifting become illegal? If not, I am not at the mercy of the whims of a DJ, no more than I am at the whims of when a TV station plays episodes of Doctor Who - once it's on my DVR I have it forever.
The conversion factor you're using is completely invented, though, extrapolated from the current rates. The fact is that internet radio provides census precision for playcounts, which (I and some others think) should make those listens more valuable. In another sense, listeners are effectively filling out a survey for each play, giving the stations more information about their listeners, but the stations are keeping all the value for themselves. Even though there's an orthogonal problem of royalty rates that the stations labor under, this setup is more of the same.
Sure, but the thing is that broadcast radio numbers are also a guess. They have always been a guess. In my more cynical moments I'd say that current rates are engineered to hide the fact that the radio advertising industry has been pulling a fast one for the past 75 years.
People do forget that the older markets were smaller, more controlled so more people were funneled through them such as radio. Services like Pandora, Spotify and even iTunes are really better in nailing down real listens and tracking much better (who knows how many true listeners there were really in the past other than Nielsen type predictions) but also there were less avenues to get content so it was more valuable to get on there.
It is the same problem in games with the previously distinct console markets where you can get more per game because there are less options. Now there are tons of options and it is about bigger user base at a lower per sku revenue take.
The internet based services are more open and there are more of them vying for your attention (which is good) but that you need to do more amazing things to stand out than before.
The controlled markets like radio, movie distribution, consoles (sort of -- Xbone from next gen) since they are controlled/limited and the costs are higher to get on them, they to get bigger takes. But they aren't necessarily better. Many artists, movies, games aren't seen on those or would even be possible if they were still tightly controlled and limited markets. It doesn't make it easier to succeed, it adds more competition and they end up being bigger markets but there is less exclusivity to it. In the end this is good I believe but artists that would never have been seen for instance can now actually be seen at least in access and not locked out. An artist can now get verifiable tracking counts as well as before a station might cheat them like a publisher might do in books/games since it is estimated or trusted to the publisher/stations to report correct plays.
Lets look at this a different way because comparing to broadcast radio is dicey.
I pay for Pandora One. It costs me $36 dollars a year. Assuming all songs are exactly 3 minutes long & I listen 24/7 for an entire year...
((42 U.S. dollars) / (1 million * 3 minutes)) * (1 year) ~= $7.36
That doesn't seem like a bad deal, 1/5 of my yearly fee going to the artist, the rest to operation and profit of Pandora.
... the thing is, I don't listen to Pandora 24/7. At best I listen a few hours a day, on average for a whole year maybe an hour a day. With that, the ratio drags down to 1/100 of my yearly fee. Once cent of every dollar I spend on a music service ends of going to the actual musicians? That sucks.
Maybe the license fees go more to groups above the artist that don't deserve it, maybe Pandora's operating expenses eat up most of the pie... I don't know who to blame for the situation, I just know it's rigged against the people actually creating the music.
And this is why pirates don't feel bad about copying music. When it is damn near impossible to consume music without 99% of the cost going to the distributors, why should anyone feel bad using distribution systems which don't charge?
Buy physical music from local shops and go to shows and buy tickets from local distributors. (I'm lucky to live in a place where I _can_ see top shelf music without paying the Ticketmaster ransom) Especially buy swag at these shows if you're really interested in your money getting to the people who deserve it. Otherwise, it seems pretty clear that any other way of 'legitimately' buying music pays nearly everything to the middle man.
Artists need to quit thinking of Spotify/Pandora as revenue generators and more as advertisement for 1) live peformances and 2) quality physical goods (nicely pressed vinyl, for example).
The days of radio-only hits are over (or close to being over).
I reject this line of thinking completely. It leads to artists concentrating on monetizing existing art rather than creating new art. That's bad for society. Furthermore, live performances? Really? So that guy that creates an amazing piece by himself using Garage Band or whatever, but can't perform it live: he's just screwed?
And it's also just bullshit logic. It's the equivalent of saying that photographers should give up getting a decent commission on their photographs, and instead concentrate on selling champagne at a high mark-up at their gallery exhibits.
Wait what? $1,500 for 20,000 plays? If the average song is 4 minutes long[1] that's 55 days of continuous music. So, a radio station that played non-stop music, 24/7 for a year is going to pay just under $10,000 total in royalties.. for a year.
That's pretty amazing, but I guess it's a matter of supply and demand: there's an awful lot of music (and a lot of it is awful).
The margins vary wildly in radio. It's a sales driven business, once you meet core costs it's 85% gravy after that (the only things that scale with your sales are the music rights fees and commissions paid to sales persons). I've seen mom & pop stations that can't get by, and I've seen modest small market stations with 40% margins because they run a slim ship.
That's not the case. Let's assume we're talking about an average radio station, in terms of sales.
Music rights are negotiated as a % of sales, not on a per play basis. So large stations with large sales pay a fortune in music royalties. It's not a set rate.
With an average station, those 20,000 plays cost a radio station $10,000 +/- a few grand depending on the sales category they fall into with the music rights companies.
24/7 music for a year would cost around $60,000 (for said average radio station).
It was not played by one terrestrial station, but played by all the terrestrial stations that signed the royalty contracts with the company which represents the artists and collects the royalties. Of course, the company gets a big chunk of the royalties.
Also, radio stations only play your song for a couple seasons, an entire year if you are lucky and maybe more if you are one of the most successful bands. Pandora and similar services are always around 24/7.
I find it interesting that SV is normally in favor of capitalism and free markets, yet some seem tolerant of the government forcing content owners to license their content at a fixed price.
There is often more inovation in a space when the market participates are left to decide on their own what to do.
Government is the one granting the licensing rights in the first place, so neither position (fixed or non-fixed price licensing) is in favor of free market capitalism.
Consider that a lot of us see the extent of current copyright restrictions as a massive overreach.
A totally "free market" in terms of intellectual property would be to totally remove copyright and other artificial IP restrictions, not one where IP owners have free reign.
As such, compulsory licensing is a way of reducing the impact of restrictions that would not have existed in the first place without government interference in the market.
indeed. i am also equally sick of hearing this complaint. tho, it's for a different reason.
music is not a freakin' product, people. it's a service. musicians are PERFORMERS. outside of the last 60 years or so, there was no such thing as "selling music" where you're not talking about sheet music. musicians get paid for performing.
the last 60 years has been a music bubble. welcome to the correction.
It's kinda hard to get a regular performance gig when a venue owner can simply throw on a CD or pay a few $ to a DJ. Jukeboxes massively undermined the market for jobbing musicians.
so, what you're telling me is your [i mean the royal 'you', not necessarily you you, anigbrowl] performance isn't as good as cd playback? people would rather listen to your cd than listen to you?
makes me think you should either 1) change careers or 2) get better.
see? the technology gets dumped on as a scapegoat. we all hear this. this case is no different.
the real issue? competition has moved back to the streets instead of in the promoter's office. you're still fighting to get heard. and you still have to be good. and you still have to be lucky. because these days, every tom, dick and harry can become "a musician" by putting out a cd. it's the same fight every creative industry is fighting right now. it's just that professional photographers don't really have a pandora to shake their fist at.
just be glad it's not the 16th century and the only way to earn money as a musician was to get commissions from nobility. the phrase "starving artist" exists for a reason.
I own radio stations. We pay about $0.50 per song played in music rights fees over the course of a year.
Those 20,000 plays are worth a solid $8k to $12k in music fees. (my stations are about industry average in terms of sales; rights fees are based on a % of sales, so the fees can be dramatically higher in sum for a large metro station)
Bottom line, musicians are getting screwed across the board. The music rights companies are collecting much higher fees from the streaming services than they do for radio stations (music radio stations will typically pay 10% to 15% of their sales to music rights; depending on the bracket their sales fall into), but the point that remains the same is that the musicians are getting chump change out of the deals.
I've been listening for years and the only "commercial" I ever hear is some infomercial type segment early sunday morning for a half-hour. Other than that it's non-stop mostly old or obscure Rock. I wonder if the Sunday-morning infomercial is just to set the "advertising" base?
I looked into the station once, and it seems to be run by a wealthy, reclusive guy as a hobby. Wherever he goes in the Denver area, his library reaches him. Expensive hobby...
Half hour infomercials can be very lucrative in the radio business (particularly if they reach a metro like Denver). I would say that guy is covering a lot (or all) of his costs with it. He could definitely be generating anywhere from $2,000 to $5,000 per 30 minute infomercial depending.
You can buy cheap stations for between $100,000 and $500,000 these days. KYEN / 103.9 FM, is a 16,500 watt station, and if that fully covers the Denver metro based on its tower location, then it's worth a fair chunk of money (low 7 figures). My guess is the owner has had it for a long time, before FCC radio licenses were auctioned; back when you could just pay a small licensing fee and apply for it.
I've seen a couple of cases like what you're describing, where someone owns a station as a hobby essentially. If you're running a very tight ship, it doesn't take a lot to pay for basic operations.
KYEN is certainly an interesting station. It's not uncommon for it to go off the air for days at a time. I assume that's because it's completely un-manned (there are no DJs), so occasionally someone has to find time to go into the building and reboot a piece of equipment.
An average radio audience of 1800 is not as low as you think.
1 M people within range of the average radio station /
10 radio stations per market *
5% of the time the average person spends listening to music radio
=
5000
I am not any sort of industry expert, and I could conceive of my numbers being off by a factor of 10. My point is that I don't think you can dismiss out of hand the chance that radio stations are getting fewer than 1800 pairs of ears per play.
The solution to the problem is right in the blog title:
... "Less Than What I Make From a Single T-Shirt Sale!"
If you are good enough (and lucky enough) to get your music heard a million times, then use it as a platform to sell real, tangible things to the people that enjoy your music.
Each play in Pandora is only listened by one and only one person. Each play in terrestrial broadcasts is listened by potentially thousands of people, depending on the demographics of the covering areas. So it is uni-cast vs broadcast.
If the OP understands the difference, has a reasonable estimate on the number of listeners for broadcasts, and is reasonably good at calculation, he would find out that Pandora actually pays more.
Plus, Pandora provides more and better services to the listeners for the artists than terrestrial broadcasts. A simpel example. I am working and listening to Pandora. A nice song catches my ears. I could immediately look at the song, its album, the artists, and all other related information. Terrestrial broadcasts don't provide such a service. So Pandora is providing a deeper and more comprehensive marketing for the artists than terrestrial broadcasts, and it reaches more diverse population. That is a big benefit that the OP does not consider.
Well some radio stations do provide information about a song with the right equipment. HD Radio has that capability, as well as RDS (radio data system) which may be found in more modern radios before HD spectrum. That said, many radio stations that broadcast an RDS signal may not actually provide correct information.
Pandora, Spotify, Google All-Access, et al., certainly do a better job about informing the listener and as such I'm better informed about the music I now listen to.
These numbers are weird, I had a completely different experience. I have 440,000 plays on Spotify of songs from my album, and I've made $2420 off of that.
Notice that the chart in the article shows that Spotify is paying 8x what Pandora is. 116k plays for $12. And that this is 40% of the songwriting payment only, since it's a member of a band.
My point is that your conclusion that they pay DOUBLE the rate is entirely based on this number that you give no justification for. If your comment started with "Lets assume each AM/FM broadcast went out to 5,000 people," then the rates would be roughly the same. So yeah, you can assume that number is true, but what's the point.
In principle you have a point, but a quick google shows that his number is entirely reasonable. I mean, I wouldn't read to much into the exact numbers here, but the scale is definitely comparable.
I've always viewed Pandora, Spotify and services like that as discovery services. They let me hear the music before parting with a more money. If I find an artist that I really like I'll buy their album or some merchandise.
Given the breadth of music I get from Pandora there's no way I'd be able to afford every album of every artist I listen to on the off chance I might like them.
Also you need to remember that a lot of people won't have the disposable income to buy albums, tshirts or subscribe to satellite radio, so that money from Pandora isn't going to be replaced.
Yes it's not much, but there's more to it than that number alone.
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[ 4.3 ms ] story [ 279 ms ] threadWhy sign up for a system which provides almost no return?
ETA: Sorry, the first line was a "couldn't resist", presented (badly) as just raising another popular meme and invoking discussion of the conflict thereof.
The second line refers to the fact that somewhere he signed a release whereby (however obtuse, obfuscated, and nigh unto unavoidable) such financial abuse was consented to. In comparison, consider how schools are offering near-free degrees (real ones, like MIT) in retaliation to exorbitant student debt, and doctors & patients are opting out of the hideous costs of government-run healthcare by returning to cash & subscriptions (I don't mean to provoke arguments over those, just as points of comparison). Somewhere, somehow, alternatives exist where real payment is demanded and he actually would get paid (and no I don't mean "make money performing", as some music just isn't per se).
How do you apply "information wants to be free" to music like this?
1) Information wants to be free
2) Everything is information
... I don't think we can have a useful discussion.
I thought I detected you heading in that direction. Yes, people do try to make that argument.
Sheet music is like an instruction manual. Follow the instructions, you can make something. I consider instructions to be information. Recorded music, on the other hand, is a performance. A performance is art, while sheet music describes art?
I don't have technical definitions, this is just how I see it.
You're arguing for the existence of a soul.
Yes an MP3 is literally and pedantically information, however it also has an additional worth to me that I find rewarding to pay for. I believe people who enjoy music but use this argument to acquire it for free are deluding themselves.
How do you differentiate? An .MP3 is just another data file, trivially copied, with the added downside that government has decreed that under certain common circumstances anyone can play it while paying him less than a pittance for it. I'm not advocating this view, just noting the painful reality thereof.
It's always struck me as just a way to absolve yourself of guilt for pirating music.
I think the real phrase should be "Information is just information, people want it to be free."
Even the 100th largest metro area would typically have 5k people listening to a play of a track.
If you assume 5000 people listening per play at 18797 plays, and then calculate a cost PER LISTENER (at $1373.78 royalties paid) you end up with $0.014617 royalty per 1000 "performances" of the song (counting every listener's radio as a "performance"). AND, when you multiply that back out with the number of "performances" on Pandora, you get....$16.94.
Considering WAY more people probably heard the song on the radio, possibly by a factor of 5 or more, this is a HIGH estimate; actually doing the math would likely come out with a much lower equivalence, but it's the right order of magnitude.
I am all about protecting artists rights to earn, and for buying music that I'm listening to. As the parallel comment by smack_fu mentions, though, this is really about the insignificance of the Pandora market size more than anything else. That and the inability of a particular blogging artist to do enough basic math to realize the royalty per performance is higher on Pandora than it is on the radio.
[1] http://www.radio-media.com/song-album/articles/airplay66.htm...
[2] http://www.arbitron.com/home/mm001050.asp
Pandora has exactly one listener per track played?
1% of people listen to a popular radio station 24 hours a day?
I'd say the Pandora 1 track per customer is a safe assumption. Sure, I've known cafes and dinner parties where Pandora was streaming to multiple people at once, but I've also known lots of friends who have Pandora playing on their headphones even when their headphones aren't on their heads. Nobody I know who uses Pandora actively pauses it every time they leave their computers, so I expect it washes out in the end.
The methodology of arbitron says that if radio can be identified within audio range, you are deemed to be 'listening' to it.
Can we still claim, by this methodology, that every Pandora device has an average of one listener? Only if you claim every radio has an average of one listener by this methodology as well (which is highly doubtful) or if radio and Pandora are used significantly differently (which I don't strongly believe: as you say, it's played in cafes in place of radio).
I have to disagree: I think the vast majority of people listening to Pandora are doing it on their laptop on headphones, while many radios (today) are not being listened to by a single listener.
Regardless, the estimates I used intentionally underestimated the Arbitron radio audience numbers by an order of magnitude. Some of the larger markets go up to 150k listeners on the top station. If you're right and significantly more than 1.0 people listen to a particular Pandora stream on average, then it still have to be more than about 5-10 listeners per instance before it hits the numbers that radio is claiming. And I would be very, very surprised if the average were anywhere near that high. I think if Pandora had evidence of that, they would be able to demand more money from advertisers, for one thing.
As to the methodology of Arbitron: Not really relevant for my purposes, because I think that it's accepted by advertisers as reasonable. At some point, if the numbers were complete garbage, the advertisers would have noticed and stopped relying on them; advertisers certainly track the results of their campaigns, after all.
So when you say "Only if you claim every radio has an average of one listener by this methodology as well", I think you misunderstand the core problem, which is that the article compares stats that aren't equivalent.
The issue is in how these listens are counted. So yes, you can pretty much claim every Pandora device has an average of one listener. Users of Pandora have their own personalized streams, and every time a song is played on a person's stream, it's counted as 1 play, and is heard by 1 person.
In contrast, radio stations have one stream that many many people listen to. When a radio station broadcasts a song once it's counted as 1 play even though that song is received by X radio-receivers and heard by X people (where X is the reach that station has, for example, 150k).
The issue is the article compares plays on Pandora (where each play as counted reaches 1 listener on average) to plays on radio (where each play as counted reaches upwards of 150k listeners).
How many more times is this bullshit argument going to be offered up by people who wouldn't be caught dead listening to the radio for this very reason?
One could make the argument that a Pandora listener should be worth more, as they are choosing to listen to the personalized Pandora station rather than more forcibly listening to whatever the radio DJ puts on. However, the whole debate is obviously not as clear as the OP wishes it to be.
Is that not the whole point of Pandora? If it was the same as radio then what would be your incentive to use it?
There are hundreds of thousands of people who heard that song, like that type of music, and would consider attending a show and spending real money to get in. They might buy a tshirt too. Pandora could notify listeners when the shows come up, and help bands plan their tours to towns with more fans.
It could be real revenue for the bands, and for Pandora.
EDIT: Doesn't even mean a UI change, could be done with ad retargeting, or any performance marketing mechanism.
Daisy (Beats by Dre's "Spotify") is trying to do this by partnering with Topspin and we shall see what happens - I'm excited to check it out.
The fact is, all-you-can-eat streaming platforms will never scale to the amount where payouts for plays are significant if they continue with the freemium model. Artists need the ability to sell other products and experiences to those listeners. I'm, admittedly, biased towards the idea that artists need to seek new direct-to-fan revenue streams.
Here's a piece I wrote on Hypebot about this: http://www.hypebot.com/hypebot/2013/01/music-subscription-se...
http://www.crunchbase.com/person/ian-rogers
That's all neither here nor there though, because Ian Rogers was never involved with the headphones - he was CEO of Topspin and is now running the development of the Beats music streaming platform.
I agree tying into the Beats by Dre brand is a negative for people like us, but for the demographic they are going after it will probably be better than building a brand from the ground up.
To talk about Beats being terrible - what planet are you on? Take your hipster snark elsewhere. Yes, they're primarily a fashion item. But are they dreadful headphones? No, the price just factors in their fashion status.
[1]: https://www.youtube.com/watch?v=et_PWifUd1w
The sneaky thing is that when the Beats feature is turned off, the default equalizer is tuned so that bass and treble are deemphasized, to make the difference between the two even greater.
I follow someone on YouTube that did a really good review about Beats Audio. Here's the link if you're interested.
http://www.youtube.com/watch?v=Cdbn_pmxFic
Is it exclusivity contracts with all the big venues, or something similar for labels?
I would think a startup in this space would target smaller venues that aren't under contract, and independent artists to build traction, and if the product is truly superior they would have a good chance against the incumbents.
And if LiveNation doesn't own the venue, they're probably your tour manager.
[1] http://www.songkick.com/
Now I have no reason to believe I am representative (and in fact I would be surprised if I was), but 60% of the music I have purchased in the last couple of years has been as a follow-up to a Pandora play. Another 35% has been following a Shazam tag from a radio station, and about 5% from a movie soundtrack or something like that. Of those, Pandora is the only one that causes me to buy albums instead of solely individual tracks, which is an order of magnitude more money.
So I know for a fact that N artists got money from me that they would have never gotten if not for Pandora. That doesn't help the (100-N) whose track played and I didn't buy them; but, you know, I actually didn't care enough to want to listen to them again. Or, Pandora played them while I had the computer on mute (played is not the same as listened).
Now the legitimate question is, how many people are like me, as opposed to people who use Pandora without buying anything at all as a result of what they hear? I don't know the answer to that question and I suspect neither does Pandora (they have a "buy" button so they can presumably track that, but I only sometimes use it rather than just independently look for the artist on iTunes some later time).
So it’s fine for record companies and distributors to get stiffed? Hosting, payment processing, and marketing are not free.
It is incredibly cheap to dictate the business models of others. Are you a software developer? How about you do that for free then and maybe you can do like training classes or something and you can make all of your money on that. I hear that's where the programming economy is going.
You also realize that not-yet-established musicians would pay exorbitant amounts of money to merely get heard.
So, excuse me if I have little sympathy for the "plight" of the recording-only musician.
As if that were the norm.
If I have to compare, its synonymous with building a online presence with a blogging site. It won't earn you much and you won't buying yachts with that money. But the purpose of that blogging site is to get you some following and recognition in the community.
Then you need to go on and build something awesome that sells. That is playing the bigger game.
Pandora is the first step. Not the last one.
Making music is fun, social, and status enhancing. People are going to keep doing it, and doing it enthusiastically, whether it's possible to make money from recordings or not.
+Streaming networks like Pandora and Spotify actually pay more per stream then SiriusXM does because satellite radio pays the Terrestrial (FM/AM) radio rates.
+The Math on this is confusing because a Terrestrial (FM/AM) station might pay $50 royalty to play a song but 200,000 people listened to it when it was broadcast.
Or maybe like we have the internet competing for our entertainment attention, and it is just damn good sauce.
When you hear it, you probably recognize it:
http://www.youtube.com/watch?v=gYdlqjiQPAc
If they could actually sell two minutes of commercials, I'm pretty sure they would.
Expecting them to match the rates paid by massive existing media companies is essentially wishing the startups who finally got traction in this niche, back out of the picture and the entire market back to the business models and rate of technological progress that those massive existing players deem sufficiently non-threatening to their broadcast businesses.
I have sympathy for the author. I really do. But the problem ought not be simplified down to "Pandora should pay what Sirius pays".
(Though it makes me wonder what rates the larger tech companies are paying, now that they're making similar offerings.)
Performing Live / Selling Merchandise and doing other physical appearances is the only way you will ever make any money and even great artists who tour still can't make enough money to keep producing their art (their following just isn't big enough).
I mean, it's a pretty recognizable song, just a bit old: http://www.youtube.com/watch?v=gYdlqjiQPAc
Now go look at your iTunes sales, how many copies of that song have you sold? 10? 100? 1000? How many of those sales occurred because people heard your song on Pandora, who won't play specific songs on command, and so they wanted to hear it again on their time?
Back in the bad old payola days you would have paid much more than that just to have your song even on the freakin' radio. Because that was the cost of letting other people hear your music and come to the conclusion they wanted to buy it.
[1] http://www.hypebot.com/hypebot/2013/05/pandora-reports-70m-a...
Um, this is an established band. This song is from 1993. It was pretty big at the time. That's why they still get thousands of dollars in radio revenue. That's why they aren't very impressed by the "exposure" or the $15 in payout.
http://www.indieandunsigned.com/the-music-royalty-breakdown/
If Pandora doubled what they pay out, that musician would still only make about $33. However, if that musician could get just 50% of what Pandora already pays out, said musician would get $600.
My guess is that this is the cut after the record company gets theirs.
Sirius is at ~$1/play, commercial radio is $0.07/play.
For Sirius XM, the breakeven number of listeners/play for the pricing structure to be comparable to Pandora is 70K. For Commercial Radio, the breakeven number of listeners/play is 5,000.
*edit: added the price/play numbers
I'd say that the fact that the FM station paid OP 100x more than Pandora shows how hugely the FM/AM business models have failed and how for granted so many artists took being massively rich. Guess what, there are tons of talented people out there. Software is free, and everyone can compete. I'd say that's healthy. We're no longer stuck in the dark ages of information discovery (back when if something wasn't on the radio or on TV, no one had heard of it).
Also, ngoel36 said: "If your song stream convinced nobody to buy your song on iTunes or buy a ticket to your concerts, then you have bigger problems than Pandora."
This times a million. So your music is apparently awesome but you can't sell t-shirts or concert tickets (concerts are, after all, where the the real money is made).
"Why doesn’t Pandora get off the couch and get an actual business model instead of asking for a handout from congress and artists?"
I mean, this is just laughable, given how heavily the media industry is subsidized. Case in point: http://www.theblaze.com/blog/2013/05/07/the-government-is-no...
Failed how? They have a business model that pays the artists a reasonable amount of money, while at the same time making a profit for the radio station.
Because people want to be in control of social life and have their say and not just leave it to blind forces (from Gods, to Father Stalin, to the Free Market, to technology).
You say "music is becoming a commodity" in the way people once said "It was the will of gods for you to die in the ripe old age of 30".
No, music is NOT becoming a commodity. Business players, regulations and what have you are MAKING music a commodity.If people want to reverse course, they always can.
I like the song and you probably did too, if you ever heard it. It was used in The Perks of Being a Wallflower last year.
It does strike me that many people may be under 20 and this song might actually be older than they are. So I will assume the ignorance is genuine rather than flippant.
http://www.crackersoul.com/fr_home.cfm
For another data point, I know plenty of people who had never heard of The Princess Bride, Firefly or Monty Python before me telling them.
There is no level of popularity which ensures universal familiarity. You should always assume ignorance is genuine. See also: http://xkcd.com/1053/
I'm just confused by what you are trying to achieve with this post
By design, people aren't supposed to ean real revenue from their music on Pandora. It's more about exposure, isn't it?
I mean, the supply and demand of it doesn't work out in the artists' favor, only in Pandora's. No one can find your song or you specifically, so why would you have an opportunity to earn a lot of money? There's no demand for you or your work, just work in a certain genre that you might fulfill for a few minutes.
Again, I don't mean to be harsh, but it seems like it makes sense in Pandora's case. I think it would be more reasonable to expect some benefits to exposure and fame than expect revenue. Users aren't exactly incentivized to click that (admittedly tiny) buy button under the song.
Let's look at the numbers. 1M plays for ~$42. Sounds like not much right? Wrong.
Yes AM/RM Radio paid ~$1500 but for 20,000 plays. Now ask yourself this question: how many people heard those 20,000 plays? If the rate of pay was the same ($42/1M) it would have to be 35.7M listens. Well, at 20,000 radio plays that averages 1800 people per listen. Is the likely audience higher or lower than this number? It's bound to be higher. So streaming services are in fact paying more (per listen per listener).
See http://davidtouve.com/2011/12/13/uk-radio-versus-spotify-a-c...
Sounds like Pandora needs to put real pressure on getting those reports revised to be clearer. It's unwise to be hated by the industry that you depend upon.
I think since Spotify is so much closer to owning an album than it is to radio, many artists expect it to be closer in value to album sales than radio plays.
Not saying ignorance of the proper comparison isn't happening, just that it might not be the only reason.
I don't use Spotify or Google Music. I don't know what they pay to the artist. What I do know is my friends that use them have zero reason to buy a CD. I also know even the more obscure stuff shows up on there. Once they are older and have a family, they certainly don't have time to go to more than a couple of concerts a year, and they most likely are not wearing band t-shirts past 30.
The way radio worked, you heard a song once and a while, liked it, most of the artist's other songs you rarely or never heard. There was a big incentive to buy the CD.
Musicians need to have a freemium model, where you get free, unrestricted access to some songs, and then if you absolutely love the band you pay for the rest (or you can pirate it, but there are a few hoops to jump through for that one.) It has to be convenient, on demand, and a single standard. May be its lossless audio, or may be its just mastered differently. Someone who knows more about music would have to figure it out.
Despite all of this, my favorite musicians regularly release new albums. There are a few duds, but the music is good. Countless genres blended together and mutated, with virtually unlimited choices. As far as I'm concerned, this is a music renaissance.
Why do you do this? You know that most of the money for an album doesn't go to the artist? Do you buy the physical CD or do you buy the song on iTunes?
The vast vast majority of people do not have thousands of dollars to spend on music.
I know that the money doesn't all go to the artists - what would you have me (or the GP) do instead, not pay for any of it?
Mail them a check. Mail them cash. Hand them cash in person. Send them bitcoins; if they're tech-savvy enough.
Like many scaling problems, that's a good problem to have: at that point, you can afford to have people working for you depositing checks, which is pretty much the inverse of the power relationship artists have with labels.
You don't know what the relationship with the label is. Some artists come in with their own label and only need distributor to reach a bigger audience (artists $$$/labels$$). Some come in completely unknown and the label has to front all the money (artists $ / label $$$$), and some are quite happy to be on a smaller label and let the label handle the business side of things.
> at that point, you can afford to have people working for you depositing checks
...and paying royalties for samples, collaborators, songwriters. Well now we have to hire a guy to handle all of this and you can either pay him/her a salary or a cut of the sales. Now we've slipped back into the label distributor problem.
Many of them do a good job handling fan mail. It sounds like a nice problem to have.
>There is a very good reason that many musicians become involved with labels, promoters, distributors, etc.
There are some good reasons for artists to outsource administrative errands, management. There's also the crappy reason that is the monopolization of the major distribution channels.
should be a link to somewhere I can buy albums for $10-15USD each.
I have been steadily moving to buying only digitally released music, but some artists and labels make this very difficult.
Doing it right are:
* Boomkat.com (reasonable FLAC surcharge)
* digital-tunes.com (same price for FLAC/MP3)
* bleep.com
* hdtracks.com (sort of, the markup is massive)
Failing are:
* Amazon, iTunes et al - ~256kbit-ish music, often mastered terribly. (Yes, I'm aware that AAC is a bit higher quality at the same bitrate)
* Beatport.com (you want me to pay how much extra for WAV?!)
* Almost every major label - I can't order lossless tracks from most of them
You know that if you spend $0, the artist gets nothing, right? Then their label drops them because they aren't profitable.
not necessarily. I'm quite happy to be shown ads while I stream that generate revenue for the artist.
I'm not even kidding. Nothing is stopping you from writing a $50 check and sending it as a donation.
If the artists don't like the deal that labels are giving them, they don't have to take it. They can build their own fan base, learn marketing, get exposure and sell their own stuff through iTunes and other places. A lot of artists are opting to do just that.
You don't know that, because you don't know what sort of music he listens to or what deals those artists have with their labels. There are certainly cases where labels fuck artists, but there are a lot of others where they deliver value. This idea of blaming all the big bad labels is little more than an excuse not to pay for music. Along the way, it's crushed lots of small independent labels that had great partnerships with their artists but get blamed for the perceived moral failings of the majors.
hey there now, sonny. I'm 51, and some of them still fit just fine, thanks. I even go to several concerts each year.
[1] https://news.ycombinator.com/item?id=5935672
It is the same problem in games with the previously distinct console markets where you can get more per game because there are less options. Now there are tons of options and it is about bigger user base at a lower per sku revenue take.
The internet based services are more open and there are more of them vying for your attention (which is good) but that you need to do more amazing things to stand out than before.
The controlled markets like radio, movie distribution, consoles (sort of -- Xbone from next gen) since they are controlled/limited and the costs are higher to get on them, they to get bigger takes. But they aren't necessarily better. Many artists, movies, games aren't seen on those or would even be possible if they were still tightly controlled and limited markets. It doesn't make it easier to succeed, it adds more competition and they end up being bigger markets but there is less exclusivity to it. In the end this is good I believe but artists that would never have been seen for instance can now actually be seen at least in access and not locked out. An artist can now get verifiable tracking counts as well as before a station might cheat them like a publisher might do in books/games since it is estimated or trusted to the publisher/stations to report correct plays.
I pay for Pandora One. It costs me $36 dollars a year. Assuming all songs are exactly 3 minutes long & I listen 24/7 for an entire year...
((42 U.S. dollars) / (1 million * 3 minutes)) * (1 year) ~= $7.36
That doesn't seem like a bad deal, 1/5 of my yearly fee going to the artist, the rest to operation and profit of Pandora.
... the thing is, I don't listen to Pandora 24/7. At best I listen a few hours a day, on average for a whole year maybe an hour a day. With that, the ratio drags down to 1/100 of my yearly fee. Once cent of every dollar I spend on a music service ends of going to the actual musicians? That sucks.
Maybe the license fees go more to groups above the artist that don't deserve it, maybe Pandora's operating expenses eat up most of the pie... I don't know who to blame for the situation, I just know it's rigged against the people actually creating the music.
And this is why pirates don't feel bad about copying music. When it is damn near impossible to consume music without 99% of the cost going to the distributors, why should anyone feel bad using distribution systems which don't charge?
Buy physical music from local shops and go to shows and buy tickets from local distributors. (I'm lucky to live in a place where I _can_ see top shelf music without paying the Ticketmaster ransom) Especially buy swag at these shows if you're really interested in your money getting to the people who deserve it. Otherwise, it seems pretty clear that any other way of 'legitimately' buying music pays nearly everything to the middle man.
The days of radio-only hits are over (or close to being over).
And it's also just bullshit logic. It's the equivalent of saying that photographers should give up getting a decent commission on their photographs, and instead concentrate on selling champagne at a high mark-up at their gallery exhibits.
That's pretty amazing, but I guess it's a matter of supply and demand: there's an awful lot of music (and a lot of it is awful).
1. http://a-candle-in-the-dark.blogspot.co.nz/2010/02/song-leng...
Music rights are negotiated as a % of sales, not on a per play basis. So large stations with large sales pay a fortune in music royalties. It's not a set rate.
With an average station, those 20,000 plays cost a radio station $10,000 +/- a few grand depending on the sales category they fall into with the music rights companies.
24/7 music for a year would cost around $60,000 (for said average radio station).
There is often more inovation in a space when the market participates are left to decide on their own what to do.
A totally "free market" in terms of intellectual property would be to totally remove copyright and other artificial IP restrictions, not one where IP owners have free reign.
As such, compulsory licensing is a way of reducing the impact of restrictions that would not have existed in the first place without government interference in the market.
music is not a freakin' product, people. it's a service. musicians are PERFORMERS. outside of the last 60 years or so, there was no such thing as "selling music" where you're not talking about sheet music. musicians get paid for performing.
the last 60 years has been a music bubble. welcome to the correction.
m3mnoch.
so, what you're telling me is your [i mean the royal 'you', not necessarily you you, anigbrowl] performance isn't as good as cd playback? people would rather listen to your cd than listen to you?
makes me think you should either 1) change careers or 2) get better.
see? the technology gets dumped on as a scapegoat. we all hear this. this case is no different.
the real issue? competition has moved back to the streets instead of in the promoter's office. you're still fighting to get heard. and you still have to be good. and you still have to be lucky. because these days, every tom, dick and harry can become "a musician" by putting out a cd. it's the same fight every creative industry is fighting right now. it's just that professional photographers don't really have a pandora to shake their fist at.
just be glad it's not the 16th century and the only way to earn money as a musician was to get commissions from nobility. the phrase "starving artist" exists for a reason.
m3mnoch.
Those 20,000 plays are worth a solid $8k to $12k in music fees. (my stations are about industry average in terms of sales; rights fees are based on a % of sales, so the fees can be dramatically higher in sum for a large metro station)
Bottom line, musicians are getting screwed across the board. The music rights companies are collecting much higher fees from the streaming services than they do for radio stations (music radio stations will typically pay 10% to 15% of their sales to music rights; depending on the bracket their sales fall into), but the point that remains the same is that the musicians are getting chump change out of the deals.
103.9 FM: http://rocktherockies.com/
I've been listening for years and the only "commercial" I ever hear is some infomercial type segment early sunday morning for a half-hour. Other than that it's non-stop mostly old or obscure Rock. I wonder if the Sunday-morning infomercial is just to set the "advertising" base?
I looked into the station once, and it seems to be run by a wealthy, reclusive guy as a hobby. Wherever he goes in the Denver area, his library reaches him. Expensive hobby...
You can buy cheap stations for between $100,000 and $500,000 these days. KYEN / 103.9 FM, is a 16,500 watt station, and if that fully covers the Denver metro based on its tower location, then it's worth a fair chunk of money (low 7 figures). My guess is the owner has had it for a long time, before FCC radio licenses were auctioned; back when you could just pay a small licensing fee and apply for it.
I've seen a couple of cases like what you're describing, where someone owns a station as a hobby essentially. If you're running a very tight ship, it doesn't take a lot to pay for basic operations.
1 M people within range of the average radio station /
10 radio stations per market *
5% of the time the average person spends listening to music radio
=
5000
I am not any sort of industry expert, and I could conceive of my numbers being off by a factor of 10. My point is that I don't think you can dismiss out of hand the chance that radio stations are getting fewer than 1800 pairs of ears per play.
... "Less Than What I Make From a Single T-Shirt Sale!"
If you are good enough (and lucky enough) to get your music heard a million times, then use it as a platform to sell real, tangible things to the people that enjoy your music.
If the OP understands the difference, has a reasonable estimate on the number of listeners for broadcasts, and is reasonably good at calculation, he would find out that Pandora actually pays more.
Plus, Pandora provides more and better services to the listeners for the artists than terrestrial broadcasts. A simpel example. I am working and listening to Pandora. A nice song catches my ears. I could immediately look at the song, its album, the artists, and all other related information. Terrestrial broadcasts don't provide such a service. So Pandora is providing a deeper and more comprehensive marketing for the artists than terrestrial broadcasts, and it reaches more diverse population. That is a big benefit that the OP does not consider.
<edit> grammer
$1373.78 / (18797 * 10000) * 1000000 = $7.31
Now lets do the math for Pandora:
$ 16.89 / 1159000 * 1 000 000 = $14.57
So this writer is ACTUALLY COMPLAINING that Pandora merely pays DOUBLE the royalty rate of terrestrial radio.
Given the breadth of music I get from Pandora there's no way I'd be able to afford every album of every artist I listen to on the off chance I might like them.
Also you need to remember that a lot of people won't have the disposable income to buy albums, tshirts or subscribe to satellite radio, so that money from Pandora isn't going to be replaced.
Yes it's not much, but there's more to it than that number alone.
I stopped purchasing digital music goods (amazon mp3s, itunes downloads) a while ago.
I subscribe to Spotify for music discovery, and resort to discogs.org to purchase vinyl of music I want to keep, to own, to cherish on my Dual 1219.
I am not alone in this philosophy.