As War Of Words Heats Up, Is Pandora Really Underpaying Artists? [CHART]
This week, musicians from Pink Floyd to David Lowery, have shared thoughtful and impassioned arguments taking Pandora to task for paying artists too little and their campaign to pay even lessLowery went so far as to offer payment records that showed his song had received 1 million plays on Pandora, and received a payment of $16.89.
'Lies' & 'Falsehoods'
Yesterday, Pandora founder Tim Westergren fought back calling many of the statements against the company inaccurate:
"The first falsehood being disseminated is that Pandora is seeking to reduce artist royalties by 85%. That is a lie manufactured by the RIAA and promoted by their hired guns to mislead and agitate the artist community."
As for the numbers provided by Lowery, Westergren wrote:
"There is a tremendous amount of misinformation being spread on this topic as well. First we need to clarify what a “spin” on Pandora means. Each spin on Pandora reaches a single person, compared to a “play” on FM radio that reaches potentially millions of people. In other words, a million spins on Pandora might be equivalent to a single play on a large FM station."
For backup, Westergren pointed to calculations done by blogger Michael Degusta. He concluded, as the chart below shows, that Pandora paid over $1,300 for 1 Million plays, not $16.89.
- Pandora paid a total of about $1,370.
- The band received a total of about $585.
- If Lowery received 40% of the performance royalty, “all he got" for the 1 million plays was in fact around $234.
"Whatever one thinks of the fairness of those numbers, they’re all clearly far larger than $16.89," concluded Degusta.
Is Pandora underpaying artists?
Lowery's royalty statements are indisputable. Yet, Degusta's calculations matched standard industry practice and were confirmed by Westergren.
The fairness of Pandora's payment structure is part of a much larger issue: As music transitions from ownership to streaming, should the money earned by creators shift, as well? Or has the new paradigm inexorably changed the equation?