We follow the news of streaming internet services pretty closely around here on the Sage Audio mastering blog, as we feel that many of the streaming services (Pandora, Spotify, Rdio, Rhapsody, etc.) are very important to the current ever-evolving state of the digital music industry. This is particularly true of smaller artists looking to make a name for themselves, with the internet providing new means of marketing and distribution not available to any previous generations of artists.
However, not everyone sees these services as positive, and many artists have long been questioning the royalty rates — particularly from Pandora. The reason Pandora is often singled out is because it pays compulsory license fees set by the government rather than negotiate with the owners of the songs (usually the record labels). And though Pandora has responded with some of the rates it pays, many artists still feel the rates are unfair.
Pandora Paid Less Than a T-Shirt Sale
The latest artist to voice displeasure is David Lowery of the bands Cracker and Camper Van Beethoven. He wrote a blog post at trichordist.com titled, “My Song Got Played On Pandora 1 Million Times and All I Got Was $16.89, Less Than What I Make From a Single T-Shirt Sale!.”
The song in question is the early-90s hit “Low,” and the title pretty much sums up what the post is about, there are a couple of specifications that need to be made (that Lowery makes in the article). First, he only owns 40 percent of the song, with the rest of the band receiving the rest of the songwriting royalties — so the song actually earned a total of $42.25 during the final quarter of 2012.. Second, this is only for the songwriting portion of the song, and Lowery and the rest of Cracker receive a higher rate as the performer of the song, though he says he would regard that rate as “unsustainable.” Third, he admits it’s a pretty expensive T-Shirt that provides him with more than $16.89.
In the post, Lowery urges Pandora to “get an actual business model” instead of relying on the compulsory rates, and he also encourages artists to post their own royalty rates to fight what he sees as fees that are too low. He also points out that artists that feel the rate is unfair are unable to opt out of the service.
What This Means for Smaller Artists
Those artists that post their rates likely will be bigger, more well-known artists like Lowery, as many smaller artists are happy for the exposure they receive on the service. That is not to say that the compulsory licenses are wrong or right, but rather to point out that there are two sides of the coin. Congress is scheduled to review the licenses paid by Pandora (and other companies operating in similar manners) in the near future.
However, other high profile artists have recently come out against the service, as well. Specifically, the members of Pink Floyd wrote an op-ed against Pandora in the USA Today, and singer Martha Reeves did the same on MSNBC’s theGrio blog.