hypebot

Pandora 's Westergren Responds To Artist Airplay Submission Controversy

Yesterday's story that Pandora was requiring that all music considered for airplay must also be available for sale as a physical CD on Amazon drew some strong comments from Hypebot readers. An online poll showed that for 40%, the practice tainted their view of Pandora and another 14% claimed they would never use the service again.

I asked Pandora for a response and founder Tim Westergren replied:

We appreciate the scrutiny everyone's bringing to this – it’s a very important issue, and one for which we feel a great sense of responsibility.

Here are some general thoughts from Pandora on this.

There are a number of reasons for us to add this requirement. It’s something we’ve been contemplating for a long time.  Just to be clear, it's not about making money from Amazon.  We don't get any portion of the $29.95, and even though we're thrilled at the amount of music we sell through them, the commissions we get are a small part of the overall business (it's all about advertising). So these requirements have nothing at all to do with revenue.

There are really three principal reasons – user experience, improving the meta data, and managing submissions.

Pandora Forces $29.95 Payments From Indie Bands

(UPDATED) Until recently, Pandora accepted music from indie artists at no cost in almost any form including home burned CD-R's. But now, in part because of a deal to display album cover art via Amazon's servers,  submissions must be available as a physical CD for sale on Amazon and include cover art and a UPC code to even be considered for airplay.

Compliance with the new rules will cost artists in several ways. According to its FAQ page, to get play on Pandora you now need:

• a CD of your music
• a unique UPC code for that CD
• your CD to be available through Amazon (must be a physical CD, not just MP3s for download)
• the legal rights to your music
• MP3 files for two of the songs from your CD
• free Pandora account, based on a valid email address, which can be associated with your music

In addition to art and packaging costs, Pandora explains that to comply with the new "available through Amazon" rule, indie artists should join the Amazon Advantage Program. Membership costs $29.95 each year plus Amazon takes 55% of the list price of every CD sold.

Established artists and labels already comply with Pandora's new rules. But for an indie artist trying to win new fans with a little help from Pandora and to keep his hard earned cash by selling direct, the new threshold may shut off an important avenue for exposure.

More:

• Pandora 's Founder Tim Westergren Responds
• POLL: What Do You Think Of The New Pandora Requirements For Indie Bands?
• Read one Hypebot reader's open letter to Pandora in the Comments section below.

VOTE: What Do You Think Of The New Pandora Requirements For Indie Bands?

Online Surveys & Market Research

More: Pandora Forces $29.95 Payments From Indie Bands

Senate Passes Webcaster Settlement Act 2009

The U.S. Senate has passed the Webcaster Settlement Act of '09. A similar bill passed the House several weeks ago. If signed by the President, the bill would suspend controversial royalty rates set by the Copyright Royalty Board while online broadcasters negotiate with labels, publishers and other rights holders.

Many webcasters say that the current proposed rate increase would put them out of business.

Are Artists The New Gatekeepers? Clear Channel Radio & Front Line Mgt. Think So.

Both broadcast and online radio are searching for new ways to engage listeners in the iPod age and radio giant Clear Channel is betting that name artists may be the answer.

In a partnership with Irving Azoff's Front Line Management, Clear Channel is is launching artist personal experience a.p.e. radio ( artist personal experience), a stand-alone company that will produce artist driven own online channels, according to Billboard. The new broadcasts will launch in July with The Eagles, Weezer & Christina Aguilera. Each 24 hour channels will play music chosen by the artist along with interviews and commentary.

Sirius XM has found success with both short and long term artist channels that range from a Sinatra driven station featuring duaghter Nancy as a host to a shorter term Dave Mathews channel celebrating the release of a new record and tour.  Other artists have also launched their own online broadcasts...

Both Founders Resign From Last.fm

 
"After two years running Last.fm within CBS we feel the time is right to begin the process of handing over the reins. This is the latest stage in a long journey for us founders, which began in a living room in East London in 2002, and took us to the headquarters of one of the biggest media companies in the world." - Felix Martin on the Last.fm blog.

No one is sure why, but paidContet has more.

Pandora Claims Profits Close, Adds Lyrics

Pandora will reach profitability in 2010 according to founder Tim Westergren. Revenue is expected to double  this year to $40 million thanks to targeted ads delivered to 27 million registered users which are growing at the rate of 50,000 to 60,000.

About a third of the growth is coming via its popular iPhone app. “It’s a whole new world for us,” thanks to their mobile apps Westergren told Bloomberg News. “It’s changed the perception people have of what Internet radio is, from computer-radio to radio, because you can take the iPhone and just plug it into your car, or take it to the gym.”

Pandora announced that it will be adding access to lyrics using the Gracenote platform.

Webcaster Settlement Act Moves Forward

The U.S. House Judiciary Committee yesterday passed and sent on to Congress the Webcaster Settlement Act of 2009 (H. R. 2344).

The new bill is the latest attempt by webcasters to get a royalty structure that they can live with and would give them 30 days to renegotiate with SoundExchange. The previous bill gave the two parties until February. But agreements were not reached with several types of internet broadcatsers including "pureplay" or web only broadcasters, small commercial webcasters, and religious broadcasters.

Related: Music Takes Center Stage In Congress Today

Music Takes Center Stage In Congress Today

The U.S. House Judiciary Committee is expected debate the newly introduced Webcaster Settlement Act today at a hearing that will also consider the Performance Rights Act that would require broadcast radio stations to pay performers royalties similar to those which songwriters receive.

Digital broadcasters currently pay performance royalties and it is their overall payments that the Webcaster Settlement Act 2009 attempts to address. Introduced  byHouse Judiciary Committee Chairman Rep. John Conyers,  the bill provides webcasters with a new opportunity to obtain financial relief from the Copyright Royalty Board's 2007 decision on royalty rates. Webcasters hope to negotiate royalty rates similar to those set for cable and satellite broadcasters.

Last.fm Adds Visuals, More Personalization

Last.fm has introduced a new visual music player that combines its personalized online radio stations with a continuous stream of artist images, music videos and other media of the artist being played. Users can now also create multi-genre stations by mixing music tags - "80s" and "Soundtrack," or "French," "60s" and "Female" for example - to fine-tune their channel. Multi-artist radio enables users to launch stations based on combinations of their favorite bands.

And perhaps just as importantly for ad-supported Last.fm, the new music player also provides advertisers with new visual branding opportunities. A brief video demo:

CBS & Last.fm Consolidate Online Radio Units

The CBS Interactive Music Group has been formed to bring together various CBS digital music assets including CBS Radio's more than 100 online audio streams, various mobile applications and Last.fm. At launch, the combined assets of the newly formed CBS Interactive Music Group reach almost 40 million unique monthly users worldwide.

David Goodman who has been named President, CBS Interactive Music Group. A veteran of CBS Radio since 2002, Goodman has served as President, Digital Media and Integrated Marketing for the division since December 2007.

At launch, the new CBS Interactive Music Group will be comprised of:

CBS Tops March Internet Radio Ranking

from RAIN

Edison Infinite Dial Study Shows Growth And Potential Of Online Media

The annual Infinite Dial report from Edison Research was released yesterday.  Highlights of the wide-ranging study include:

• Listenership at online radio grew by nearly a third last year
  •  69 million Americans listened to online radio last month
  •  variety and control given as the top reasons
  • thanks perhaps to in-office listening 35-54 year olds dominate online radio listening numbers
• Online video also saw viewership jump by a third to  69 million

Goom Grabs $16M For Innovative Online Radio

Goom Radio has secured $16 million in Series A funding from Wellington Partners Venture Capital, Elaia Partners and Partech International. Goom, which combines free ad-supported dj hosted streams with user preferences, has tested successfully in France and will be rolled out in the US later this year.

Goom Radio U.S. was launched in March 2009 and operates from the former Clear Channel Z100 studios in Jersey City. The company is led by Rob Williams, former president of Clear Channel New York, and chief sales officer Drew Hilles, who led dMarc Broadcasting through an acquisition by Google, where he served as a director for four years.

You can get in line for a U.S. beta invite here.

Spotify User Info Compromised

More than a million users of EU based online music service Spotify had the passwords and other sign up info compromised.

"Last week we were alerted to a group that managed to compromise our protocols. After investigating we concluded that this group had gained access to information that could allow rapid testing of password guesses, possibly finding the right one. The information was exposed due to a bug that we discovered and fixed on December 19th, 2008. Until last week we were unaware that anyone had had access to our protocols to exploit it.

Jango Offers Indie Artists Pay For Airplay

Payola. Pay-to play. Ugly terms from a different era or a new way to get exposure and monetize internet broadcasting?  Jango, a US based music site with 6 million monthly listeners, has decided to find out.

For $30 for 1,000 plays, indie artists get airplay to fans of setablished artists of their choice. If a band's fans say they remind them of U2; then that band can  now target airplay to U2 fans only. A display ad running alongside encourages listeners to rate the song or become a fan. In addition to targeting by music taste, artists can also target listeners by age, gender and location. 

Other airplay packages include $50 for 2,000 plays and $100 for 5,000 plays. "For $50 I got 2,000 airplays on Jango. At the end of the day, I had nearly 400 "likes," over 50 new fans and lots of positive comments, says NYC indie artist Mickey Wax. "I also saw increases in album sales and traffic to my website."

Internet broadcasts are not regulated by the FCC in the same way as over the air broadcasters; so what Jango is doing is perfectly legal.  But is it right?  In a fractured and cluttered media landscape should artist's pay to get played? How will Jango's audience react to the new music by artists they've never heard of.

Share your thoughts in the comments section and vote in our poll here.

Poll: What Do You Think Of Pay To Play On Jango?

Online Surveys & Market Research

Some Broadcasters Reach Net Royalty Deal

SoundExchange and the National Association of Broadcasters (NAB) have reached agreement on internet streaming rates for broadcast radio stations that simulcast programming over the net or  that create new internet stations.

Under the agreement, rates for simulcasts or web channels operated by local radio stations are reduced 16% in 2009  then gradually increase through 2015 - from $0.0015 per streamed sound recording in 2009 to $0.0025 per stream by 2015. Additionally, the NAB has  reached agreements with individual record label groups that waive some previous statutory restrictions allowing, for example, artists to be played more often during a four hour period.

But internet only broadcasters have been unable to renegotiate rates with SoundExchange and yesterday announced that the official deadline to settle had passed without agreement. (more here).

Internet Radio SoundExchange Talks Fail

The Digital Media Association confirmed that negotiations with SoundExchange over net radio royalties did not yield an agreement before the February 15 deadline. The DiMA, on behalf of its members which include RealNetworks, Pandora and MTV has been negotiating with SoundExchange since March of 2007 when the Copyright Royalty Board increased some webcasters royalties by 300%. 

"I am disappointed that DiMA negotiations with SoundExchange did not result in an agreement...," the DiMA's Jonathan Potter said in a statement. "Many points were agreed upon, but we are unable to resolve our principled differences regarding the applicability of sound recording performance royalties to various activities of multifaceted online companies, particularly when those activities and their revenue are not directly associated with the performance of sound recordings."  Potter promised to continue the fight in the new session of Congress.

iLike Responds To Deleted Sony & WMG Songs

The official word from iLike on recent deletion of some Sony and Warner Music Group artists:

"From day one, iLike has offered only music that is fully licensed from copyright holders, via a combination of direct licenses as well as third-party relationships such as Muze and Rhapsody. From time to time these arrangements are renewed and re-negotiated, and sometimes it's hard to avoid temporary outages in the middle of discussions."

Last.fm Asks UK "Hackers" To Help Extend Reach

Contest Offers  £1000 Prize

Last.fm will host “Hack Day” on December 14th at Corbet Place Bar, East London.  At the event which is hosted in partnership with CodePlex, Microsoft's open source project hosting web site, developers will be invited to utilize Last.fm’s free open source web services in a one-day competition to build a new Last.fm application.  The winning developer will receive a grand prize of £1000, with additional prizes for the competition’s runners-up including Xbox 360s.

Available since the site’s inception in 2002, Last.fm’s web services, which developers can use to extend the Last.fm experience beyond the site, have been utilized by third parties to create a host of music applications showcased at Build.Last.fm. One popular application, a mash-up titled “LastTube”, utilizes listener data from Last.fm to recommend YouTube video clips.

Pandora Mints Energizer Music Forum

Pandora is expanding its offering with music forum sponsored by Energizer batteries. The new Energizer Forum offers a place for Pandora users to discuss all things music: songs, artists, playlists, gadgets and more.  As with all things Pandora, the site is clean and simple. Videos will be added next month.

The sponsorship with Energizer is part of Pandora's aggressive push to monetize their traffic ahead of large pending royalty increases.  Major brands have already been drawn to the site both because of an impressive user base and a cutting edge yet safe image. (No small accomplishment in the overcrowded online music space.) By delivering ads outside of the listening experience, the Energizer Music Forum also overcomes Pandora biggest challenge: to expand revenue in ways that do not offend users accustomed to enjoying their stations without the clutter of ads.

According to VP of Acevertising Cheryl Lucanegro, Pandora has been researching users' behavior...

Pandora Cuts Staff 14%. Are More Layoffs Ahead?

"This is a very sad day for Pandora, and for me personally. Today we reduced our staff from 140 to 120 employees. Like virtually every company, Pandora is not immune to the challenges presented by the current economic turmoil. We are trying to react quickly and responsibly to the new environment...

There are tough times ahead for the economy, but our listenership is growing rapidly, the Internet radio royalty rate resolution seems finally near, and the explosion of mobile devices like the iPhone are opening up a world of opportunity for internet radio to expand off the desktop. Moreover, our ad sales are growing so well that, not only did we not make any reductions there, we need to continue to hire more."

These layoffs come from what is by many measurements one of the more successful music start-ups. As founder Tim Westergren pointed out in the announcement, battles like royalty rates are almost behind the company.  But a bad economy is a bad economy; and Pandora is smart to conserve cash as it works toward profitablitiy. Expect more such announcements before the end of the year from across the music and tech sectors.

Senate Passes Bill That Could Save Internet Radio

There is new hope for Pandora and other webcasters, but any deal is far from done.

The U.S. Senate yesterday approved the Webcaster Settlement Act and sent it to the President to be signed.  The bill authorizes internet radio services and Sound Exchange (as agents for copyright owners and performers) to negotiate new royalty agreements retroactive to 2006. A new deal could settle rates through 2015.  The House of Representatives passed the bill September 28.

Now the hard work begins.

U.S. House Throws Net Radio A Lifeline

The U.S. House of Representatives last night approved by voice vote legislation that could help all webcasters. The Digital Media Association (DiMA), SoundExchange, NPR and the RIAA have issued a joint statement applauding the swift action of the House . The bill now moves to the Senate with passage expected early this week

The legislation authorizes SoundExchange, on behalf of copyright owners and performers, to negotiate new royalty agreements for internet radio through February 15, 2009 with DiMA, NPR and all other net radio services including simulcasters. This modification enables negotiations to continue while Congress is in recess as well as implementation of an agreement if the parties can reach an accord. 
   
Nothing in this bill affects the scope of sound recording performance rights or any underlying copyright law.

Pandora & Net Radio Need Our Support Now

Legislation is being considered this weekend that would help internet radio (read more).  Pandora and others are calling on fans of net radio to contact their Congressmen today.

After a yearlong negotiation, Pandora, artists and record companies are finally optimistic about reaching an agreement on royalties that would save Pandora and Internet radio. But just as we've gotten close, large traditional broadcast radio companies have launched a covert lobbying campaign to sabotage our progress.

Labels, Publishers & Internet Broadcasters Agree On Mechanical Royalties

NOW IT'S UP TO THE COPYRIGHT ROYALTY BOARD

UPDATE: The agreement only covers interactive net broadcasters like Pandora or Rhapsody and not general net streams like Radio Paradise and SOMA-FM. (more @ RAIN)

A diverse group of industry trade groups have jointly submitted a draft agreement to the Copyright Royalty Judges proposing mechanical royalty rates for interactive streaming and limited downloads including subscription and ad-supported services.

The group includes:

• Digital Media Association (DiMA) representing such major online music services as AOL, Pandora, Live365, Real and Yahoo!
• National Music Publishers’ Association (NMPA)
• Recording Industry Association of America (RIAA) representing the mjor record labels
• Nashville Songwriters Association Int'l (NSAI)
• Songwriters Guild of America (SGA)

Performance royalties collected by Sound Exchange are not a part of the agreement which proposes that mechanical royalties be calculated as a flexible percentage of revenue with minimum payments...

Warner Music Partners With Deezer

Warner Music International and French based online jukebox Deezer today announced a global content and revenue partnership. Warner Music’s catalog will be available for on-demand streaming as part of Deezer’s free service. Under terms of the deal, both will share in ad revenues. France is online with content and UK and Germany will follow by early 2009.

Much like imeem, Deezer offers users the opportunity to create and share online playlists, join a community of music fans and stream both traditional and ‘intelligent’ internet radio stations. Links to purchase downloads  are also embedded throughout. While the deal is called worldwide there is no word as to whether Deezer plans to expand to the US or other non-EU territories.

Can Payola Save Internet Radio?

A Silicon Alley Insider op-ed piece by Doug Perison of net radio ad network TargetSpot advocates for what I think has to be one of the worst ideas I've heard in a long time: saving internet radio by selling sponsored song plays.

Internet radio is struggling under new draconian royalty demands; and unlike broadcast radio, payola is  probably legal on the net.  I can even imagine broadcasters would add identifying sponsor tags. None of that makes this a good idea.

People listen to music on the net to escape broadcast radio's "ick" factor created by endless ads, hype-driven DJ's, overproduced promos.  To bring any hint of that  to internet radio is a huge mistake.  If you want to help internet radio, fight the royalty rates or better yet waive any royalty payment at all from select broadcasters. It may not earn Don a commission, but it will keep millions from switching stations yet again.

AOL To Relaunch Shoutcast

Next week AOL will be relaunching SHOUTcast.com, a global repository of online stations with a daily worldwide audience of over 500,000. Upgrades included improved search, new user feedback options and increased monetization. The re-launch is the first step in an ongoing process rolling out more robust broadcaster tools and APIs to provide for 3rd party developers.

New features include a search toolbar, Facebook application, SHOUTcast blog, new skins, and a widget that can be integrated across several social networking groups including Bebo. Greater integration with sister product WinAmp and other media players is also part of the upgrade.