Last year Pandora paid it’s CEO over $29 Million Dollars. To be exact $29,167,388.
Aretha Franklin got $0 from pandora for her 1967 recording of RESPECT.
At least that’s what we must assume from Pandora CEO’s admission they are no longer paying royalties on pre 1972 recordings.
This confirms what was reported in the Wall Street Journal last year! So the woman who sang RESPECT get’s no respect from Pandora or royalties from this classic 1967 recording. Instead of finding a sustainable business model to create lasting value for shareholders, Pandora has resorted to legal gimmicks to try to temporarily prop up it’s bottom line.
Meanwhile Pandora executives are selling stock at fast clip.
The latest legal gimmick from Pandora relies on the fact that sound recordings made before 1972 are covered by a patchwork of state law and not federal law. Pandora’s highly questionable interpretation is that it doesn’t have to pay royalties to performers like Aretha Franklin on these songs.
It’s estimated that Pandora saves %5 with this gimmick. 5% from older artists who sometime are no longer physically able to to tour and perform. Classy.
Pandora is already massively unpopular with songwriters and performers after last years failed legislative attempt to lower royalties. It then sued all three songwriters collectives. Now it is on a collision course with the rest of the recorded music business and artists. Pandora has no friends left in the music business. How is this a good long term strategy for it’s shareholders? What happens when this company tries to expand to other markets that don’t have the compulsory licenses and rate courts that Pandora so skillfully abuses?
It’s bad enought that terrestrial radio already doesn’t pay performers royalties. Now Pandora has stopped? It should also be noted that Sirius/XM is also not paying Royalties on pre 1972 recordings. How did they both separately come up with that idea? hmmm. Surely there is no collusion here? And it’s Songwriters that are required to operate under DOJ anti-trust supervision? WTF?
When will the sickening greed from these multi-billion dollar silicon valley firms finally end? Who will finally stop these modern day robber barons? Pandora demonstrates once again it is the most artist unfriendly music company out there. Act accordingly folks. Plenty of other options out there.
( You can do something about the terrestrial royalty problem. You can Tell Congress #IRespectMusic. This is a petition to institute a royalty for performers on terrestrial radio.)
The Trichordist 
Oh come on, David.
The #irespectmusic campaign nails the *real* problem: the lack of performance royalty payments by terrestrial broadcasters. If *all* broadcasters — terrestrial, satellite, & Internet — paid the same fair royalty to performers, then the rightful flow of money to music creators could begin.
That fair royalty, however, would almost certainly be significantly *less* than what Pandora is paying now. You don’t really think that terrestrial broadcasters would pay performers 60% of their gross revenue (as Pandora does), do you?
Yet you keep harping on Pandora as if they’re the problem. Sure, not paying performance royalties on pre-1972 recordings sucks. A much larger industry not paying performance royalties at all certainly sucks a bit more fiercely, no?
Hey, I’m no Pandora fanboy. I think their whole algorithmic pseudo-radio thing is a soulless imitation of what can be — but hardly ever is these days — a vibrantly creative artform of its own. But they’re not the problem.
The problem is the hodgepodge of laws thrown together by lobbyists for the broadcast & recording industries that leaves companies like Pandora scrambling for every loophole they can to avoid insanely punishing compulsory royalty rates, and thoroughly discourages the kind of innovation that might generate viable new income streams for artists.
If Pandora went away today, absolutely nothing would improve for artists. Seems like your ire & influence could be targeted more effectively.
-Bill Goldsmith
AG6AB
radioparadise.com
Eliminate the federal rate courts and all this shit would stop. We had no problem with pandora until started trying to lower our rates. first through legislation and then through the ASCAP-Judge-for-life-Song-Czar. Then there is the little matter of the 1.8% they pay songwriters. completely criminal. Nevermind we’ve had our individual rights infringed cause we’re not allowed to opt out of these services. Finally how can you possibly justify cutting off royalties to older performers most of whom could really use the money, when the CEO raked in 29 million last year? Does Radioparadise pay royalties on pre-1972 masters? I bet you don’t. If so you’re just as unethical.
1. The pre-1972 issue is based in the historic greed of the recording industry. The law needs to be fixed. So does the situation that virtually guarantees despicable behavior by Pandora.
2. Yes, we do pay royalties on pre-1972 masters.
3. Compulsory licenses are not an inherently evil thing. Eliminating the federal rate courts — and, by extension, compulsory licensing — would narrow the world of digital radio down to the players with a big enough bag of lawyers to negotiate their way onto the playing field.
4. The problem with the rate court decisions — at least as regards performance royalties — is that the recording industry bought their way into rates so slanted in their favor that companies like Pandora are virtually forced into the kind of behavior that (rightly most of the time) pisses you off.
If terrestrial broadcasters and digital broadcasters all paid 8-10% of revenue to performers (on top of the 4%-5% they already pay to PROs) — in other words if everybody paid what XM does — then you’d get your decent revenue stream, Pandora could actually turn a profit, and companies like mine could survive (we lose our 12%-of-revenue deal at the end of this year).
Rant about Pandora & the rate courts all you want, but anything less than the kind of rate equity I’m talking about here is going to make a dent in this mess.
1.How is the pre 1972 deal the fault of the record companies? This is without any factual basis. And it doesn’t fucking matter a wrong is a wrong. There should be a new Godwin rule for blaming everything on the record labels.
2.You neglect to mention that the bulk of Sirius’s listening hours are talk and news. You can’t have the same percentage for sirius that you have for an all music service. Do the math.
3. Sirius actually has a business model. They charge people for their service. Therefore the percentage of revenue actually means something. Pandora has decided to make it’s service free thus it’s revenue to artists means nothing.
4. Doesn’t matter Pandora will be out of business since it’s wildly unprofitable and investors are fleeing.
5. the inherent un-americanness of digital compulsories. Why as a songwriter I should be forced without legal recourse into letting a service use my songs? If pandora is so great. If streaming is great so great for us? why does the government force us to participate in the scheme?
6. Man Santa Cruz has really sold it’s soul to the NEW WALL STREET.
7. Who cares if what I’m doing doesn’t make any difference. ITS THE RIGHT FUCKING THING TO DO. I sleep better at night knowing i’m not a sell out. You can not say the same.
8. and sign the #irespectmusic petition to make terrestrial pay those performers. I did.
The following link suggests that musicians that are not currently contracted with a PRO but would like to contract with one now – can opt out of streaming services. I am wondering if someone can confirm that? I am aware that musicians that were already in could not opt out of streaming services. http://www.scribd.com/doc/169037906/Pandora-v-ASCAP
This is above my pay grade. but you’re interpretation looks correct. of course pandora will fight this and Song-Czar-Judge-For-Life will probably rule against us.
I’m not going to defend my finger-pointing on the pre-1972 royalties. Maybe I’m full of shit. I agree with you that those artists should be paid.
I did sign the petition, and have encouraged my listeners to do so. The harm done to artists by the free ride that US broadcasters have had for decades on performance royalties is staggering. It’s a wrong that desperately needs to be righted.
I sleep just fine, and I doubt that anyone who actually knows me would label me a “sell out” — though if you want to, there’s not much I can do about that.
It would be Otis Redding getting writers royalties for this track. Makes the article look a bit silly.
Sorry Nick, Otis would be getting paid for the songwriting, not the performance. The performance is by Aretha Franklin.
I do not want to make everyone angry on here, as I am an artist and I can get pretty emotional. I do not mind if sites play my music, if people like my music because they heard it on another website, they will hopefully go to itunes and buy it. I do have people that reached out to me after they heard my music and asked where they can purchase it. I would have never made those sales if the website was not playing my music. Anyway – i hope everyone can come to a common solution so there is not all this negativity surrounding the world of music. Yeah pandora is making money, but us artists are becoming more popular when people hear our music. Radio stations too, if they want to play my music, great, more people hear me and I am being promoted for free. Love it! I do not want to fight with them, to me, it is all free marketing, if people like my tracks enough, they buy.
Alexander, we respect your choice as you should respect the choice of other artists to decide how their work is used and exploited. If others feel as you do that Pandora provides a certain value, than they can make that decision for themselves right? If Pandora offers so much value to musicians than musicians would certainly want to make the choice to participate. Why is Pandora so afraid that artists might not find it so valuable to them? Hmmmmmm.
Hello, to be honest, I do not know all the intricacy’s of the law on this one but if they removed me from different websites, and less people heard my music, then it would be harder for me to get my music out there, that is all that I am saying really. I guess for super successful artists that do not need the promotion they may not like their music being played and not receiving any money. I hope my post above did not sound disrespectful to those artists, I certainly did not mean to sound that way. All artists are influenced by other artists and so without those artists I probably would have never been inspired. I guess I am one of those that will never want to lose touch with my beginnings, which is sharing the art, more so than earning the dollar, but not everybody is going to feel that way like me, and I do not think they are wrong for feeling their ways, I just do not always feel like if someone plays a track of mine that I should be paid because I am appreciating that my music is getting played, it is just sad to see people getting so angry. So I see both sides of it, hope it all works out for everyone so they can live in peace with their art and continue to progress . . . .
Again Alexander, as you get to make the decisions with your music that make sense to you and your career, so should other artists be able to make the same choices. This is a very simple matter of consent. No one should be forced to do with their work something they do not want. If these services provide such great value to artists then artists will embrace them. If these services do NOT provide value to the artists, than the artists should be able to opt out. That just seems fair.