High royalty fees could cause Pandora to close its music box
While nobody is arguing that artists shouldn't be paid for their work, this Copyright Royalty Board decision has always seemed a bit shortsighted. First of all, artists don't make a penny for music broadcast on traditional radio, even though radio station owners bring in plenty of dollars through advertising. Second, since Pandora doesn't just stream audio, but determines a listener's musical tastes and streams music from artists they might like, the service is an amazing promotional tool for musicians who might otherwise not be heard. Why would an organization that says it's concerned with paying artists try to shoot that service in the foot?
Webcasters have to pay a fee every time they stream a song -- and that fee is rising from 8/100 of a cent per song last year to 19/100 of a cent per song by 2010. The new royalty rates are hitting Pandora especially hard because the company streams hundreds of thousands of songs to hundreds of thousands of listeners simultaneously. I assume similar services like Last.fm are also feeling the pinch, but Last.fm was recently purchased by media giant CBS, while Pandora is an independent company with shallower pockets.
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Reader Comments (Page 1 of 1)
4-4-2 said 11:46AM on 8-17-2008
Ahh yes, Pandora.com.
I used to be a paying Pandora.com listener for about one year or so, until they were no longer allowed to offer their service to users located in Europe. While I was a Pandora customer, I not only paid for the Pandora subscription but also for CDs of the great new artists I discovered through Pandora (quite a few). I have never spent so much money or time on music like I did while using Pandora.
I always felt Pandora was kind of a "shareware" model for music. It was really "try before you buy", with the advantage that I didn't have to try genres I know I don't care about, which made it not only more fun but also more efficient in finding music of my interest (and therefore reasons to spend money on it).
I'm afraid I don't know enough about the music business to tell if the industry's attitude towards services like Pandora.com pays in the long term. All I know is that I haven't felt the need to purchase any new music since the "European" Pandora was shut down.
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David Conrad said 12:21PM on 8-17-2008
Minor clarification: You say that "artists don't make a penny" from radio airplay. That's true for performers and sound engineers and anyone who does not own a copyright in the song itself. "Songs" and "a particular recorded version of a song" are two different things, each with its own different copyright. Performers who didn't write a song are typically owners only of the "particular recording" copyright and, as you say, don't get anything from radio airplay. Composers, however, typically own the copyright to the song and do get something from airplay.
FWIW: Legislation has been introduced in Congress currently to require radio stations to pay for both copyrights, but it has not yet passed (and may never).
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nka said 1:50PM on 8-17-2008
Pandora is a wonderful service and I have discovered many new artists as a direct result of listening to customized stations. It would be a shame if the service was terminated.
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LeeH said 1:50PM on 8-17-2008
Actually traditional radio does indeed pay royalties through BMI and ASCAP. As I recall, the money goes to the songwriter or composer, not the performing artist.
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David said 7:59PM on 8-17-2008
First of all,to David Conrad: there was no reason for correction,since the article clearly stated ARTISTS don't make a penny from radio airplay.Secondly,I have been in the music business most of my life,as an artist,songwriter,engineer and producer.Internet radio has created a market that never existed before,and has made a lot of folks a lot of money they would not have made otherwise.The RIAA is full of crap.They only want to add to their already bloated coffers.And the so called "artists" who whine about "illegal downloading" (i.e. Metallica,etc.) should be ashamed of themselves for biting the hands that feed them.I have been a Pandora subscriber since it's inception,and have discovered numerous artists I would not have heard of otherwise.I also listen to various other internet radio stations on a nearly daily basis,which causes me to go out and buy music I I would never have heard before.As a musician,as far as I'm concerned you can "steal" (i.e. download) all my stuff you want.I've made thousands of dollars because of it.It's a new day.Folks need to either deal with it or get the hell out of the business and become accountants.
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Sean said 7:59PM on 8-17-2008
Check out my response here for some ideas for Pandora:
http://seansrant.com/pandora-dont-die-some-ideas-for-pandora-to-save-themselves/
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jordan said 8:24AM on 8-18-2008
i love pandora, dont take it down!
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Mike said 8:24AM on 8-18-2008
There is only one solution possible: move the server outside the US where it will not be subject to US laws.
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Ryan Zielke said 10:12AM on 8-18-2008
I've listened to Pandora since it first started. I also have bought music from other artist because Pandora helped me discover them. It would be ashame to lose Pandora.
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gahikr said 11:27AM on 8-18-2008
Congress needs to stop pandering to the Big Media Companies that stifle start-ups, small businesses and American creativity and ingenuity. The copyright board needs to be replaced with an alternate such as revenue sharing model or a free market based solution where rights are auctioned off or traded as opposed to a flat fee.
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