Radio Fairness? Sirius/XM Paid My Band $2,213 Pandora Paid $91

By the sound of it you’d think that Pandora pays a lot of money to artists compared to something like Sirius XM radio.   Pandora keeps comparing the percentage paid to artists (50%) to satellite radio (10%).  And they keep crying out for “fairness”.

This is really manipulative.  Pandora is largely an ad supported model.   Sirius/XM is subscription supported.  As a result Sirius has much better revenues.  It doesn’t make sense to compare percentages.

Let’s look at what the two services really pay!

So for the 3rd quarter of 2012

Sirius paid Camper Van Beethoven  $2,213.70

Pandora Paid Camper Van Beethoven $91.07

And terrestrial radio?  Or what civilians call normal local FM/AM?

well… let’s just say they  paid me A LOT more than either of these services.

Now wait a minute!!  Pandora supporters say  that terrestrial radio doesn’t pay any royalties to performers.  That’s true, but only technically true.   Because of a quirk in the laws  terrestrial radio pays THE SONGWRITERS not the performers.  Often times they are the same.  sometimes not. But terrestrial radio is paying royalties.  Pandora is purposely distorting the facts.

Shareholders:  what other facts might they be distorting?

8 thoughts on “Radio Fairness? Sirius/XM Paid My Band $2,213 Pandora Paid $91

  1. This actually begs a further question:

    You got about 2/3 the royalties from Slacker as you did from Pandora. Both pay royalties at the same 114(d) statutory rate. Are we seriously meant to believe that Slacker has 2/3 the subscriber base that Pandora has? I would have thought it was more like 1/4 or 1/3.

    I understand that Slacker has three tiers of subscribership, including a “premium” tier that resembles Spotify and therefore uses a privately negotiated royalty instead of the statutory rate, but I also am under the impression that Slacker Premium’s subscribership is, as the lawyers say, de minimis.

    What gives?

    – bill.

    • Well didn’t musicians, unions, labels, publishers give Pandora a 50% discount on those 114(d) statutory rates? Did slacker get the same discount.

      Also you have to wonder about the collective intelligence of a company that stabs in the back the people that are already giving them a %50 percent break. What happens if pandoras government bail out end run fails? I’m not in the mood to give them a 50% discount next time.

      Also if bill fails, consider the royalty judges attitude towards pandora. they just tried to fire these judges. I would not want to go in front of the Copyright Royalty Board after that.

      • Ah, didn’t know about the 50% discount. (I guess I wasn’t reading your previous posts carefully enough.) Well then that makes perfect sense – Slacker has about 1/3 the subscribership of Pandora and pays the “rack rate.”

  2. People of every political stripe should be angered by Pandora’s blatant cash grab. They sell ads because people want to hear music. The ad price goes up if more people listen to music. But they want to pay the music providers less????? There’s no logic here. Why would anyone take this seriously? Pandora is the guy who rents the land to the circus. They just get a fee. The circus gets the lions share. Why do they think they’re more valuable than the music providers? The myth of a “webspace” in and of itself, being valuable was busted in the first internet bubble burst. Content Rules!!! These guys are living in the past.

    • “But they want to pay the music providers less????? There’s no logic here. Why would anyone take this seriously? Pandora is the guy who rents the land to the circus.”

      I’m very sorry to say that this is today’s business model. Pandora get away with this sort of blatant bad bargaining in the same environment that allows corporate lobbyists to anonymously buy politicians, and presidential candidates to boast about tax evasion. The only way to counter this behavior is to spread the word, as David Lowery is doing so effectively. Thanks, David.

  3. David, your post seems at least as manipulative as you accuse Pandora of being. First, you yourself acknowledge that “Sirius has much better revenues.” So why SHOULDN’T they be paying you more (just look how much bigger the Pandora payment is than other, less successful webcasters)? If you’re fine with a successful business paying you a smaller percentage of their revenues as long as the check feels big enough, why the animosity to Westegren for suggesting both Pandora and artists will suffer if rates get set too high?

    Second, webcasters like Pandora pay songwriters AND performers, whereas terrestrial radio only pays the former — the fact that you’re both and therefore get something from terrestrial radio doesn’t make that fair, or Pandora misleading. Again, you seem to be OK with smaller-than-possible checks from FM as long as they feel big. And yet when Pandora points out a fundamental difference in costs between them and terrestrial radio, you shout that’s beside the point because look how little Pandora is paying me!

    Finally, since my own SX statement showed Pandora as 51% of my total and Sirius as a measly 1.4%, I’m curious how much of the delta on either statement has to do with amount of play. Do Sirius programmers simply play CVB more than Pandora’s algorithm? Does the Cracker statement show a similar gap?

    Finally, my own SX statement showed Pandora as 51% of my total and Sirius as a measly 1.4%,

    • Hello Tim.

      Nice to hear from you.

      I strongly disagree with your charge of manipulation. In fact it’s funny. Pandora is clearly crying poverty and being manipulative by comparing percentages of gross revenue to traditional broadcasters with totally different monetization models. I’m simply reporting that if you look at actual payments to artists you see how little pandora pays when you compare that to Sirius. If I compare Pandora and Sirius for Cracker it’s even MORE lopsided. I specifically chose Camper Van Beethoven as to be fair. That is, I picked an artist with less traditional radio play.

      Look, I’m not trying to ram a bill through congress, So I have no obligation to exhaustively examine every potential angle. I am just pointing out the obvious flaws in Pandora’s arguments. I’m pointing out the things that Pandora has not been forthcoming about (Firing judges, standing The Sherman Act on it’s head etc etc).

      Pandora is a 2 billion dollar for-profit company and they freely chose a largely “ad supported” business model. They also chose to operate under a Compulsory License rather than voluntary licenses. It seems that Pandora has many other options rather than to pass a law that forces artists to bear the entire burden of their financial missteps.

      Where do I say that it’s “fair” that terrestrial radio pays songwriters but not performers? I’m simply pointing out that pandora has conveniently left out the fact that terrestrial radio pays any royalties out of it’s public statements. And you are a smart guy. You know why they are doing that? they want to give the impression that pandora is unfairly burdened with royalties and terrestrial radio is not. That is not true and THAT is highly manipulative. However I’m quite flattered that you think a handful of musicians with a small blog with little readership can have that much effect on a Public company with 60 million customers.

      Finally our friends at Pandora, if they are so sensitive to criticism they should have thought twice about using their 60 million users in a very public political fight to pay artists less. If Tim doesn’t want to be criticized with this bill, he should withdraw his support. Especially when the bill is loaded with all kinds of nasty goodies that were probably placed their by the NAB as they benefit the NAB as much as anyone. We will be examining that specifically next week.

      David

    • This is, frankly, the kind of thing we’re all used to from Google. There’s a simple reality: Pandora wants higher profits on the backs of artists.

      Pandora cried poverty when they were pre-IPO. Then they cashed out in their IPO–Tim Westergren is making about $1 million a month in stock sales according to the SEC. Fine, good for him. (I realize that’s chump change at Google, but he still makes more in a month than his “middle class musician” will make in their lifetime.) But–did Pandora offer to bonus the artists who helped them get to an IPO by taking a cut in royalty rates? No. Also fine. Who expects gratitude from VCs?

      But now they are still crying poverty because they haven’t updated their business model and Wall Street demands more profits. So what’s the quickest way to increase profits? Tim’s kicking it old school–jam the artists. This time it’s with big lobbying bucks.

      So please don’t insult the intelligence with this trickle down innovation malarky. IRFA is just the 1% bullies wanting to get richer still.

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