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Pandora Shares Artist Payment Figures

Soulskill posted about 2 years ago | from the money-for-nothin' dept.

Businesses 152

An anonymous reader writes "Today in a blog post, Pandora has shared some details of the fees they pay to musical artists for playing songs over their music streaming service. Over 2,000 different artists will pull in $10,000 or more in the next year, and 800 will get paid over $50,000. They provided a few specific examples as well. Grupo Bryndis, who has a sales rank on Amazon of 183,187 (in other words, who is not at all a household name), is on track to receive $114,192. A few earners are getting over $1 million annually, such as Coldplay and Adele. 'Drake and Lil Wayne are fast approaching a $3 million annual rate each.' The post segues into a broader point about the age of internet radio: 'It's hard to look at these numbers and not see that internet radio presents an incredible opportunity to build a better future for artists. Not only is it bringing tens of millions of listeners back to music, across hundreds of genres, but it is also enabling musicians to earn a living. It's also hard to look at these numbers, knowing Pandora accounts for just 6.5% of radio listening in the U.S., and not come away thinking something is wrong. ... Congress must stop the discrimination against internet radio and allow it to operate on a level playing field, under the same rules as other forms of digital radio.'"

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Pandora's Problem is repetition (5, Insightful)

NinjaTekNeeks (817385) | about 2 years ago | (#41602389)

Every day I listen to Pandora on the way to/from work. Inevitably I will hear the same track, often more than once and skip it. I use Pandora to discover new artists related to the well known artist I entered. Obviously if Pandora keeps playing the same tracks from this artist they will have to pay them top dollar, if they play obscure and less known (cheaper per track I assume) they will make me happy and lower expenses. I blame Pandora for this problem, not the artists.

Re:Pandora's Problem is repetition (1)

Anonymous Coward | about 2 years ago | (#41602461)

I only hear it in the local coffee shop. This hasn't been a problem. I've been exposed to some interesting new stuff that way. Browsing their site, I see they have "genre stations". Maybe you've subscribed to a limited genre? Hopefully you get all the stations with one subscription, otherwise I can see how you might be forced into a limited selection.

Re:Pandora's Problem is repetition (2, Informative)

wolrahnaes (632574) | about 2 years ago | (#41603271)

Pandora's "stations" are self-defined. You tell it a band or track you like, it creates a station based on that. You then thumb up or thumb down songs it plays and it adapts the station to your preferences.

I think they have a number of predefined base stations these days, but they didn't when I started using it and I haven't really explored them other than one comedy station.

The subscription just gets you higher quality audio, no ads, and a Flash/Flex-based desktop player.

Re:Pandora's Problem is repetition (1)

sirboxalot (791959) | about 2 years ago | (#41604601)

I find that the more likes I've put into a station, the more repetitive it can be. It also digs down and finds obscure tracks from an artist that gets more likes than others, or so it seems. I think the key is just make new stations once in a while, using one band as a jumping-off point.

Re:Pandora's Problem is repetition (1)

zippthorne (748122) | about 2 years ago | (#41604731)

You want to use a few specific songs from that band as your jumping off point. Otherwise it will base it's song types on the band's entire collection of works.

Re:Pandora's Problem is repetition (5, Informative)

Cryophallion (1129715) | about 2 years ago | (#41602513)

This is based on their algo which is based off of your likes and dislikes. Have you noticed that after you dislike a song, they tend to play a song you liked before? They want to keep you happy. They do tend to play your artist (if you made the station based on an artist) about every 3-5 songs. That is usually because you will tend to like that artist's music, and because that is the main focus of the station.

Additionally, if you want more range, you can add songs or artists to a certain station to better define it for you. That way, adding a techno tune to a hard rock station may bring you something more in the middle to better refine your desires for that station.

Also, if you are having issues, make new stations. I made some for workouts, some for the kids, etc, and refined them based on those specific feature sets. I haven't had any issues with it. But the best thing you can do is add a new style to a station and give it a wider range of filters (as there is only one or two main sets to start from based on the original artist or album, further refined by your likes).

Also, if you don't like a song, literally tell it you are sick of that song. It will drop it from the playlist for a while.

Re:Pandora's Problem is repetition (3, Interesting)

tomhath (637240) | about 2 years ago | (#41602515)

The article blames Congress/RIAA, not the artists. I would think more popular tracks get played more often. But who decides how often a track is played? If it's on-demand then pay per play isn't so bad (that's what subscribers are paying for so pass some of it along to the artists), if Pandora is just broadcasting a playlist like a local radio station then the complaint is more valid.

Re:Pandora's Problem is repetition (3, Informative)

quackPOT (100330) | about 2 years ago | (#41602525)

Do you not use the "I'm tired of this track" button?

True some tracks get played a little too often, but using the 'tired of' button works well for me. Best $30 or so I've ever spent on music.

Re:Pandora's Problem is repetition (1)

Tooke (1961582) | about 2 years ago | (#41602919)

Isn't that button only available from the website interface? I've used pandora on android for a while (and ios before that) and I've only seen it when listening on my laptop. It's a shame too--I discovered it a few days ago and now I really wish I could use it on my phone.

Re:Pandora's Problem is repetition (-1)

Anonymous Coward | about 2 years ago | (#41603209)

I've used pandora on android for a while (and ios before that)

Oh, so you've upgraded.

Android: for big boys who can tend their own garden.

Re:Pandora's Problem is repetition (0)

Anonymous Coward | about 2 years ago | (#41604841)

I've used pandora on android for a while (and ios before that)

Oh, so you've upgraded.

Android: for big boys who can tend their own garden.

Android: for lazy beaners who have nothing better to do with their time than tend gardens.

Re:Pandora's Problem is repetition (2)

wolrahnaes (632574) | about 2 years ago | (#41603301)

Hit the menu button (or the "..." in the top right corner) and it's in the popup. At least that's where it is on a phone running ICS, I don't feel like finding my tablet to see if it's in the same place there.

Re:Pandora's Problem is repetition (0)

Anonymous Coward | about 2 years ago | (#41602561)

Royalty rates are set by the Copyright Royalty Board -- artists get the same amount per "listener hour" regardless of their popularity/standing.

Re:Pandora's Problem is repetition (1)

Crypto Gnome (651401) | about 2 years ago | (#41603051)

Repetition is not as bad as you claim it is.

Sure it's late '80s, but retro is chic, no?

Re:Pandora's Problem is repetition (2)

chrismcb (983081) | about 2 years ago | (#41603059)

I created about a dozen channels based on various artists, with different styles. I added in some prebuilt channels like "Today;s Adult Hits" I figured this would give me a good variety. But it didn't. One of the songs I favorited I heard once a week, another I heard several times a day. I've got a dozen channels in the mix, but one band I heard way more than others (one of the channels was based on the band)
I am currently listening to ONLY one of the prebuilt channels, and am getting a larger variety of music. I listen to this about a dozen or so hours a day, what I'd love is to listen to thousands of songs. I should only hear a repetition maybe once a week, maybe repeat my favorites a couple of times a week, not a couple of times a day. If I wanted to hear the same small set of songs, I'd listen to the radio.

Re:Pandora's Problem is repetition (4, Interesting)

SydShamino (547793) | about 2 years ago | (#41604307)

I think all of the channels you worked on just needed more love and attention. To get a truly great variety on a channel, they need to know a wider base of things you like and dislike on that channel.

I have used Pandora since 2005, primarily (90% of the time) listening to the same channel. I started it from four bands I liked with similar music, and then thumbed up maybe 150-200 songs and down maybe 100-1500 over the years. At this point the station is exactly what I want to listen to at work; it plays a several hundred songs I like, I have thumbed down maybe three songs in the last two years, and there's tremendous variety with little repeating. But that's literally years of effort crafting the station.

A pretty large number of other users created a station for themselves based on my station - I can or could see that on my profile page at one point. I think that it gets recommended to people in some fashion. One thing interesting I have noticed is that, while I've never paid for Pandora One, I haven't heard or seen an ad on Pandora since I think 2009. I've had a few conversations with employees over the years, mostly suggesting bands to add or asking (or complaining) about features they should add or removed. I wonder if they have flagged some accounts as "lead users" (or "problem users") or something like that, and have ads excluded from our accounts? Actually come to think of it I haven't hit the monthly 40 hour play cap in more than a year, either. Did they eliminate that for everyone?

Re:Pandora's Problem is repetition (1)

SydShamino (547793) | about 2 years ago | (#41604313)

Oops, meant down 100-150.

Re:Pandora's Problem is repetition (1)

SydShamino (547793) | about 2 years ago | (#41604327)

I have bought Pandora One subscriptions a few times that I've given as gifts, but I didn't think those were tied to my account except maybe through cookies at time of purchase.

Re:Pandora's Problem is repetition (1)

gman003 (1693318) | about 2 years ago | (#41603075)

I've noticed this as well - my boss usually puts some Pandora station on the office sound system. It tends to play a very limited selection - we'll often hear the same song several times a day.

I don't use them mainly because I already have a 30GB collection of carefully organized music, mostly video game soundtracks that don't exactly show up on Pandora anyways, much less organized by originating console with playlists for similar in-game context.

Pandora's problem is their love of Apple. (5, Informative)

Sanians (2738917) | about 2 years ago | (#41603149)

Pandora's problem is their love of Apple's minimalist design philosophies.

In the early days of Pandora they'd occasionally post a blog entry about improvements to their song selection algorithms. These were always met with endless replies from people saying it just wasn't working for them. Many people wanted more options, like to choose the specific song attributes they're interested in hearing. Many others wanted to give more specific feedback than simply "thumbs up" or "thumbs down." I'd personally love a "never play the same song twice" option, as I too mainly use Pandora for music discovery. Anyway, eventually one of their blog posts acquired so many replies from people complaining about the performance of the service that they quickly posted something completely different and never again mentioned anything relevant to their service on their blog.

Anyway, from what I gathered back then when they were actually talking about things, they love the "simplicity" of Apple's design, and thus seek to imitate it. One of the core Apple designs is that customization options are a no-no because they might confuse users. Instead you choose just one way that something works, and it "just works" that way, whether it does what any particular person wants or not. Thus the advanced control over the song selection process that people want is completely out of the question. You're going to hear repeats because they assume that the average listener wants it to work like a radio station that plays their favorite music, and so that's how it's going to work, even if something a little different would work better for some users.

Also, while it's difficult to claim to know without seeing the functionality of their software, I suspect their song selection engine assigns weights to how important each musical quality is that are identical for each user. In other words, they've decided that people think that vocal styles matter a certain amount, and instrumentation matters a certain amount, and the process makes no attempt to determine how much these things matter for any particular user. Thus, if you don't judge music the same way everyone else does, Pandora doesn't seem very effective. ...and for me it isn't. I tend to listen to hundreds upon hundreds of songs before it plays one new song that I like which I haven't heard before.

As for why I think I know so much about it, back when they had their "backstage" web site, I wrote a robot to scan all of the pages (they had no robots.txt at the time) and record the half-dozen song attributes listed for each song, then applied my own song selection algorithm to the data, judging the results by listening to the 30 second samples from the web site. Despite that I only had a half-dozen attributes per song, compared to the hundreds per song that Pandora claims to have, the results from my own algorithm were on par with what I got from Pandora. I thought about writing to them and asking for access to their database, but despite throwing everything I could at the problem, I never could get results that were obviously better than their own with the limited data I had. Thus I didn't think I'd have any luck convincing them I could do any better than they were doing. (They certainly weren't open to the idea that they could improve things on their blog.)

It's really quite sad. They've invested a lot in creating an in-depth analysis of a large catalog of music, but they insist on not using that data to it's fullest potential, simply because someone likes clean and simple user interfaces without a lot of confusing options.

Sometime about two or three years ago I noticed the song selection take a distinctive turn for the worse, as any time I enter a song from any of half of my favorite artists, I end up with a station that simply will not play anything other than Christian music. Thus I hear nothing but "God," "Jesus," "Lord," and "Hallelujah" which, as an atheist, annoys me to hell. I like music with lyrics that aren't depressing, and a few Christian artists create such music, and so about half of the music I listen to is from Christian artists. I just listen to only the songs that are good, and ignore the ones about God. However, most Christian artists simply try to mimic the popular artists of the day, including the depressing nature of their lyrics, but with God and Jesus and all that bullshit included. Apparently a lot of people said that they wanted stations that play only Christian music (I recall people asking for this in the early days when they still wrote about their song selection algorithm developments on their blog), but since Pandora can't have any configuration options, they couldn't make it an option. So instead they made it mandatory. Create a station with a Christian artist or a song by a Christian artist and you'll hear nothing but Christian music on that station, even if the song you use as a seed isn't even remotely Christian in nature, and even if the artist only mentions Jesus about once per album.

I really wish there were some competition in the area of song recommendation services. Unfortunately, as bad as Pandora is, it's still my best source of new music.

Try harder next time (1)

Anonymous Coward | about 2 years ago | (#41603453)

Well, that may be you. Just y'day, I bought 12 songs - all by artists I never knew but discovered just because of Pandora - from Amazon or Google. Of course there will be repetition, if you keep listening to one station. Even with one station, you can fine tune it further by up and downvoting songs you like/dislike and it will suddenly discover new songs based on your adjustments. Also, you can create multiple stations as you keep on finding different songs/styles/artists/composition.

I have been using Pandora for 4 years now, and it has expanded my musical boundaries beyond what I could have with traditional (friends/TV/media/ads/pimping money) means. There are so many great artists out there that hardly anybody knows - and I bet they are benefiting from this as much as I do.

Now, talking about the problems - have you tried to understand their problems - where big labels are milking them without providing anything back to them by forcing them to throw up major part of their income under some obscure last century laws?

It's definitely not their problem - it's a system-wide fuck up, where old companies and labels wont let anyone else redefine the market by providing innovative technology such as Pandora's.

Re:Pandora's Problem is repetition (2)

flyneye (84093) | about 2 years ago | (#41603539)

I could blame the music industry, I could blame the coy innocence of the author, for what you ask? For pouring this P*SS in my ear about "artists" getting paid. Rights holders get paid. Now maybe it really is some small time self published band about .001% of the time. Most of the time it is the herd of the greedy deluded Musicanus Domesticus who sold their soul for rock and roll along with the rights to all their songs for a slice of that " rock star " pie. Fat Cats get paid. Rock Stars get advertising and distribution as long as they are pliable, cooperative and marketable by a suit with no real imagination.

Re:Pandora's Problem is repetition (0)

Anonymous Coward | about 2 years ago | (#41603893)

Grooveshark.

Wrong occupation (2)

Dan East (318230) | about 2 years ago | (#41602395)

Well then what in the world am I doing wasting time writing software?!? Time to pull the old Casio out of the closet and lay down some tunes!

Re:Wrong occupation (2)

phantomfive (622387) | about 2 years ago | (#41602523)

Remember, Pandora, the software creators, are the ones who are making enough money to actually pay those bills.

Although I have no idea how they are actually making that much money.

Re:Wrong occupation (2, Insightful)

Anonymous Coward | about 2 years ago | (#41602843)

No, Pandora the corporation is making the money (presumably). The software creators are paid their wages.

Re:Wrong occupation (0)

Anonymous Coward | about 2 years ago | (#41604677)

The music as digital service industry players(rhapsody, pandora, spotify and the rest) are all struggling very hard to get in the black. The bottleneck that strangles them all is piracy and IRAA/courts. After a decade, rhapsody just recently reported its first ever profit which was far below market equilibrium of about 4 to 6 percent, spotify is using its european base and investment capital as an ever dwindling supply of cash for its loss leader deal in the US and pandora is still in the red. The smaller players like Rdio and such are even less successful.

It is a tough business in this country. The constant infusion of cash from investors(who knows why they keep it up) is all that keeps this industry alive.

Re:Wrong occupation (1)

SuperMog2002 (702837) | about 2 years ago | (#41604249)

They're not. They're getting closer to turning a profit, but they have yet to actually do so. https://www.google.com/finance?q=NYSE%3AP&fstype=ii&ei=sfd0UNiGEKWdiALN1gE [google.com]

Re:Wrong occupation (1)

phantomfive (622387) | about 2 years ago | (#41604273)

Oh, that's how they made money, by going public lol. Good to know.

Re:Wrong occupation (4, Funny)

mjwx (966435) | about 2 years ago | (#41603557)

Well then what in the world am I doing wasting time writing software?!? Time to pull the old Casio out of the closet and lay down some tunes!

OK, I understand the appeal of becoming a musician but seriously, how is you calculator going to help you?

Re:Wrong occupation (5, Funny)

chihowa (366380) | about 2 years ago | (#41603915)

OK, I understand the appeal of becoming a musician but seriously, how is you calculator going to help you?

He's the operator with his pocket calculator.

Re:Wrong occupation (1)

allenw (33234) | about 2 years ago | (#41604227)

I wish I had mod points. I really really do.

Re:Wrong occupation (0)

Anonymous Coward | about 2 years ago | (#41604329)

Fortunately, I do :)

Since 2007, (1)

Anonymous Coward | about 2 years ago | (#41602409)

I have been paying them $36 a year. This is (almost) the only money I've spent on music in my life.

Work of the devil (0)

Anonymous Coward | about 2 years ago | (#41602437)

Congress rightly sees Pandora as the work of the devil and and another way for the hackers that operate on the "series of tubes" to get more free stuff.

Re:Work of the devil (2)

wierd_w (1375923) | about 2 years ago | (#41602569)

No, that's not it.

See, congress knows who pays their bills, so to speak. Services like Pandora eliminate the fiction that the media companies are "needed". Without the sweet employment deals offered by big industries, like big media, the congress critters see famine on the horizon.

Services like pandora threaten their livelihoods by proxy.

Expect draconian enforcement efforts to regulate them out of the market.

Seriously? (3, Insightful)

robbo (4388) | about 2 years ago | (#41602465)

it is also enabling musicians to earn a living

If you call 800 people earning more than $50k a viable industry then I have some Florida swampland to sell you. Sounds like less than 1% of all the musicians in the world are not living in their mother's basement...

Re:Seriously? (1)

Anonymous Coward | about 2 years ago | (#41602497)

Sounds like less than 1% of all the musicians in the world are not living in their mother's basement...

Yep, that sounds right to me.

Re:Seriously? (5, Funny)

larry bagina (561269) | about 2 years ago | (#41602519)

puh-leaze. These are musicians. They live with their girlfriends.

Re:Seriously? (2)

gmacd (181857) | about 2 years ago | (#41602533)

Are you suggesting that 50K from ONE online source (by no means the full extent of their income) isn't serious?

Re:Seriously? (0)

robbo (4388) | about 2 years ago | (#41602605)

Yes, I'm suggesting exactly that. There is no reasonable way to extrapolate but a distribution with only 800 people in the head suggests the vast majority of artists are earning a few dollars per year from Pandora and not much more across the whole ecosystem.

Re:Seriously? (1)

Nerdfest (867930) | about 2 years ago | (#41602763)

And this was different before the internet?

Re:Seriously? (2)

mpgalvin (207975) | about 2 years ago | (#41602809)

Yes. This makes it too easy to audit royalty payments for correctness.
It's horrible for a man-in-the-middle business model!

Re:Seriously? (1)

Anonymous Coward | about 2 years ago | (#41602835)

Yes, I'm suggesting exactly that. There is no reasonable way to extrapolate but a distribution with only 800 people in the head suggests the vast majority of artists are earning a few dollars per year from Pandora and not much more across the whole ecosystem.

The traditional industry is much the same though probably with many more leeching middlemen who add no value.

The fact is one artist can entertain millions. Many artists are not needed and are in fact an inefficiency from a business point of view because per-artists costs are fixed.

Re:Seriously? (3, Insightful)

VocationalZero (1306233) | about 2 years ago | (#41603605)

^This. The business of music has mostly been about trying to meet a demand at optimal net profit. The industry has little incentive to look toward modern alternatives that offer them less money than they were making before; the top execs at these places actually think they can return to the old ways if they can just clamp down on the piracy issue. Their lawyers know better, but they also know better than to tell them.

Re:Seriously? (1)

Charliemopps (1157495) | about 2 years ago | (#41603771)

The artists aren't earning it. Their labels are. I doubt any of the people they mentioned had a clue this income even existed.

Re:Seriously? (2, Interesting)

TENTH SHOW JAM (599239) | about 2 years ago | (#41602719)

Musicians make money by playing venues. If they get ROI from recordings they are doing well. If they make chump change on mechanical recordings, then that is a bonus. The starving artists are the ones who are not playing live.

I had a friend who could routinely make $100 an hour playing on the street. Not massive cash, but for a kid of 18, better than flipping burgers.

Re:Seriously? (2)

Mitreya (579078) | about 2 years ago | (#41602797)

I had a friend who could routinely make $100 an hour playing on the street. Not massive cash, but for a kid of 18, better than flipping burgers.

You are seriously uninformed about the going salaries for flipping burgers. I believe $100 an hour is a rough equivalent of $200,000 a year salary

What strata of society do you live in, where such money is not massive cash?
Even if you meant "a day", that's still much more than you could ever make flipping burgers ($12.50/hour after taxes).

Re:Seriously? (1)

Anonymous Coward | about 2 years ago | (#41602825)

You have to understand the mindset. 18 year old kids can only put out an hour of real work/day.

Re:Seriously? (3, Funny)

gmhowell (26755) | about 2 years ago | (#41604855)

You have to understand the mindset. 18 year old kids can only put out an hour of real work/day.

You are not flogging your 18 year olds hard enough.

Re:Seriously? (0)

Anonymous Coward | about 2 years ago | (#41602979)

I had a friend who could routinely make $100 an hour playing on the street. Not massive cash, but for a kid of 18, better than flipping burgers.

You are seriously uninformed about the going salaries for flipping burgers. I believe $100 an hour is a rough equivalent of $200,000 a year salary

What strata of society do you live in, where such money is not massive cash?
Even if you meant "a day", that's still much more than you could ever make flipping burgers ($12.50/hour after taxes).

It's extraordinarily unlikely that this person could make $100/hr for 8 hours a day. There are times of day that are better than others, and days that are better than other days.

It wouldn't surprise me in the least that this person could hear $100 for a carefully chosen hour of work, and next to nothing for the rest of the day, assuming they even bothered to work more than that hour. Or if they had one great hour once where five people tipped them a $20, and used that as proof for all time going forward that it was a viable strategy for staying employed.

Re:Seriously? (2, Interesting)

mjwx (966435) | about 2 years ago | (#41603643)

I had a friend who could routinely make $100 an hour playing on the street. Not massive cash, but for a kid of 18, better than flipping burgers.

You are seriously uninformed about the going salaries for flipping burgers. I believe $100 an hour is a rough equivalent of $200,000 a year salary

What strata of society do you live in, where such money is not massive cash?
Even if you meant "a day", that's still much more than you could ever make flipping burgers ($12.50/hour after taxes).

The fact he said "better than flipping burgers" tends to indicate that he has some idea of what wage that kind of work attracts.

BTW, $100 p/h is not a regular wage for a busker, this would be at peak foot traffic times in nightlife areas, so maybe 2 hours on 2 nights a week (8-10 PM friday and saturday nights in my city) outside of that takings would be very slow even for a good busker. So it's good for a short stint to get some extra cash but it's not a full time job.

BTW, have you ever played an instrument. 2 hours solid on a guitar would leave your fingers shredded, 4 hours you wont feel them for a week (by solid I mean practically no breaks, playing hard for 55 minutes an hour). I have a lot of respect for people who can do this.

A$400 p/w is less than minimum wage in Oz, musicians earn their money in 2 main ways. First by performing, this is a guaranteed income rather than relying on the generosity of passers by. Secondly by teaching, most guitar teachers are also performers and have been performing for years (A$60 p/h for a decent guitar teacher in my city).

Re:Seriously? (0)

Anonymous Coward | about 2 years ago | (#41603673)

A$400 p/w is less than minimum wage in Oz, musicians earn their money in 2 main ways.

Well, in US (not sure which country or which dollars the OP is talking about) the minimum federal hourly rate is 7.25, hence the minimum weekly wage is $290 US.

Re:Seriously? (1)

larry bagina (561269) | about 2 years ago | (#41603785)

Since he mentioned A$, busking and Oz, he's talking about Australia and AUD (which is currently on par with USD). Australian minimum wage is A$15/hour =~ $15/hour = $600/Week

Re:Seriously? (3, Insightful)

tompaulco (629533) | about 2 years ago | (#41603099)

Musicians make money by playing venues.
Unless, of course, they are Studio Musicians, or Songwriters, or Lyricists, or Backup Vocalists, etc., etc.
I would have to say that the best musicians I know very rarely play venues.

Re:Seriously? (1)

Charliemopps (1157495) | about 2 years ago | (#41603791)

He wasn't telling you the truth.

Re:Seriously? (2)

Baloroth (2370816) | about 2 years ago | (#41602933)

That 800 is just 6.5% of the Internet radio streaming. That means the total Internet streaming business is over 15 times larger than that, which (assuming there is no overlap, which is of course quite false, but for the sake of argument) means there are 12,000 people making more than $50k.... which is actually a thriving industry. Now I have no way of knowing what the actual numbers are, but that represents a single source of income. Any musician will tell you that the vast majority of their income is made by live shows (except for the very very very top percentages of musicians who have 10+ million albums sold, perhaps, and even they probably make more money off shows). CD sales earn most musicians pennies on the dollar, sometimes even putting them into debt if the album doesn't sell very well. That isn't a joke, BTW, depending on the deal the record studio may actually charge the musicians for the cost of recording and advertising the album, which is very often more than the album makes. They basically make the album as an ad for the live shows.

Re:Seriously? (2)

tompaulco (629533) | about 2 years ago | (#41603159)

there are 12,000 people making more than $50k.... which is actually a thriving industry.
I don't know about that. If they are all in the U.S., that is only 240 musicians per state that earns a living wage, or about 1 per every two cities. That seems kind of sucky.

Re:Seriously? (0)

Anonymous Coward | about 2 years ago | (#41603231)

I would think that the percent applies more to the dollar variable and less to the number of artists. (It just seems more likely that the number of active performing artists earning big bucks is on the order of hundreds, maybe thousands, but not ten thousands).

But, if you consider the $50k group, if that 6.5% is just their radio income, the total amount is over $700k. Even extrapolating the $10k group gives you a figure around $150k.

Why again is this not a viable industry?

Re:Seriously? (3, Interesting)

robbo (4388) | about 2 years ago | (#41603709)

How many people get paid when a single artist earns a royalty? Band members, management? Label? How many real people split that $150k?

Re:Seriously? (1)

nitehawk214 (222219) | about 2 years ago | (#41603451)

it is also enabling musicians to earn a living

If you call 800 people earning more than $50k a viable industry then I have some Florida swampland to sell you. Sounds like less than 1% of all the musicians in the world are not living in their mother's basement...

Because someone who makes 10k off of music on Pandora could not possibly be popular enough to sell music in other places or sell tickets to shows.

The bad news is that how many of the "artists" on Pandora are actually corporations? Who owns the most popular historical music from the Beatles and other bands?

Re:Seriously? (0)

Anonymous Coward | about 2 years ago | (#41603475)

You understand that the musicians do not personally play their songs LIVE whenever Pandora plays their song, right? There is no other way you can come up with such retarded argument. This is the money they are earning for music they have ALREADY created.

and when has it ever been different than that? (2)

circletimessquare (444983) | about 2 years ago | (#41603657)

as if it were any different in the era of cassette tapes or LPs or CDs or player piano reels?

as if it were any different in the age of patronage and wealthy benefactors in the era before mass media?

here's some news for you: 1% of artists ever made a healthy living as an artist in all of human history, right now, and for all future time periods and societies

but here is the big difference: the long tail. that's the new thing

look at the picture here:

http://en.wikipedia.org/wiki/Long_tail [wikipedia.org]

the green part, the fat part of the tail, existed in the era of media conglomerates, say 1930-1980. so your

10 big bands made millions, and
100 made a couple hundred thousand,
and that's that. everyone else lived in their mom's basement

what pandora/ slacker/ etc/ the internet allows, what was not possible before the internet, is the yellow part in that chart: the long thin trailing part of the tail

so now, in 2010, you still have

10 bands making millions,
100 bands making hundreds of thousands. and now also possible due to the internet is:
1,000 bands making tens of thousands
10,000 bands making thousands
100,000 bands making hundreds, and
1,000,000 bands making tens of dollars

big deal? yeah, big deal: with a more fluid, smaller barrier of entry, that guy making a few hundred has enough positive feedback to maybe move up to the rarified few making hundreds of thousands. and we, the consumer, have a bigger, richer bounty to consume and appreciate and enjoy, that WE choose, not some suit in a music corporation who signs this band but that band due to random reasons that may have nothing to do with actual quality for us the consumer

and also, art is an aspirational pursuit: you do it because you love it, and this should be rewarding in and of itself. nobody does it for the money. well, maybe to get in a chick's pants, but if you do it just for the money, you're a moron, because there is no money in art, there never was. only those lucky few that create something that people find themselves demanding by hook or by chance, are lucky to live the life of a well-paid artist. it is always the exception, and always will be the exception. and really: do you want to listen to music by a guy who is doing it just for financial returns? for every REAL artist, it is about the art, and always will be. and a few get chosen to live financially happy for that. the rest starve, as it always was, as it is, and always will be

Re:Seriously? (1)

Charliemopps (1157495) | about 2 years ago | (#41603761)

Well, the VAST majority of musicians never even record a studio album. Most professionals earn their money playing local gigs or doing studio work for rich people that want to record something that'll never get heard. Most of the very talented guys I know can live off their earnings... just barely... and mostly because it allows them to get paid in cash and cheat on their taxes. There are a very very tiny percentage that even record an album. And of those and even tinier fraction that have their music end up on a store shelf. The path from album to store shelf is lined with bribery, payola, paid "reviews" and every other dirty trick you can imagine. The average person just doesn't have the money or connections to pull it off.

Also, it should be noted, Pandora is paying their LABEL. Not the artist. I doubt many of the people they mentioned saw a dime of this money. The record companies are almost entirely exploitative crooks. Most smart musicians that have garnered any moderate fame start their own label as soon as possible. They sell a lot less records due to exclusivity deals and out-right blacklisting from the recording industry but they still make more money over all because their label isn't taking 99% of the record sales from them simply for giving the artist the privilege of doing all the work.

I like Pandora, but it's not the answer. Piracy and its eventual destruction of the modern recording industry is the only way to save music. Wealth does not make good art.

Re:Seriously? (0)

Anonymous Coward | about 2 years ago | (#41604813)

If that $50k is 6.5% of all the income they get...

It's also hard to look at these numbers, knowing Pandora accounts for just 6.5% of radio listening in the U.S., and not come away thinking something is wrong.

Different royalties are just the beginning (5, Informative)

nixed3 (1586839) | about 2 years ago | (#41602507)

My family runs an internet radio service and I have to do the accounting for them each month. The article is referring to the fact that royalty accounting is handled in a way which makes it specifically designed to not work on the internet.

Congress created SoundExchange corporation to make sure that "artists" get paid for internet radio use, however royalties on the net are astronomically higher than broadcast. For a commercial broadcaster, you owe SoundExchange [soundexchange.com] $0.0021 for EACH SONG that EACH USER listens to. It's a royalty of $0.0021 / song*listener. This actually makes it so that your royalty costs scale completely linearly with increasing number of listeners (high variable cost, low fixed cost), which is basically the complete opposite of terrestrial broadcast where your fixed cost is your giant antenna and royalties are estimated and often fudged (high fixed cost, low variable cost). This makes economics of scale much more difficult for the commercial webcaster than the terrestrial broadcaster. With all the influence the RIAA has over Congress it would seem that this was intentional. It seems like a classic case of regulatory capture.

Note that this is IN ADDITION to annual fees that go to performing rights groups such as ASCAP and BMI. Those fees are paid annually, but they are generally lower than the SoundExchange fee.

Re:Different royalties are just the beginning (1)

alen (225700) | about 2 years ago | (#41602625)

50% gross margins is ok which is what about pandora pays. Along with spotify

Re:Different royalties are just the beginning (4, Interesting)

pavon (30274) | about 2 years ago | (#41602781)

On the other hand the class of license that a terrestrial broadcaster has puts an upper limit on the number of listeners they can have, while there is no such fundamental limit on internet radio. Furthermore, your revenues should also scale linearly with the number of listeners if you have a sane business model. So it makes sense that internet streaming royalties scale linearly, the problem is that the rate is much too high. And it wouldn't have to be if terrestrial radio lost it's Edison-era exception, and had to pay full royalties as well.

Re:Different royalties are just the beginning (1)

Fred Ferrigno (122319) | about 2 years ago | (#41603803)

Furthermore, your revenues should also scale linearly with the number of listeners if you have a sane business model.

What are you talking about? Very few prices scale linearly with quantity. It's far more common to for the unit price to go down with quantity. At the grocery store, you can buy one piece of fruit for a dollar or five for four dollars. Buy a truckload of fruit and you'll get an even better rate. Is the business model of selling fruit "insane"?

Re:Different royalties are just the beginning (0)

Anonymous Coward | about 2 years ago | (#41604151)

I hate to be that guy, but $0.0021 per song per listener is expressed as royalties=$0.0021*song*listener. Otherwise, the royalties owed decreases with the number of songs [royalties=$0.0021(listener/song)], which would be a wonderful mistake for Pandora. I know you didn't mean royalties=$0.0021/(song*listener), because that would just be silly.

To demonstrate, if 1000 listeners each hear 50 songs, I assume the royalties would total $105, not $0.042 or $4.2E-8. If you really are your family's accountant, you might want to double check your balance books, pronto.

Poor bastards (0)

Ol Biscuitbarrel (1859702) | about 2 years ago | (#41602521)

800 musicians divvy up $50k among themselves? Must be Somalian music.

Re:Poor bastards (0)

Anonymous Coward | about 2 years ago | (#41602779)

800 musicians divvy up $50k among themselves? Must be Somalian music.

Sounded to me like they were saying 800 musicians EACH get 50k.

Over 2,000 different artists will pull in $10,000 or more in the next year, and 800 will get paid over $50,000.

Re:Poor bastards (1)

rueger (210566) | about 2 years ago | (#41603201)

Oh yeah, those poor ass Somalians... K'naan [knaanmusic.com]

Good night John Boy! (1)

rmdingler (1955220) | about 2 years ago | (#41602529)

Just ask yourself one ethical question: if you can get it free, are you paying for it anyway because you can't sleep at night.

All about the numbers.. (2)

DerekLyons (302214) | about 2 years ago | (#41602541)

It's hard to look at these numbers and not see that internet radio

is just like regular radio - a very, very small number make the very big bucks. A not very much larger number make the big bucks. Most make a pittance.

How much is too much? (1, Insightful)

mccrew (62494) | about 2 years ago | (#41602543)

Drake and Lil Wayne are fast approaching a $3 million annual rate each.'

This part of the original submission got my attention. The submitter added the italics for emphasis, implying that they don't deserve it.

Drake and Wayne, good on you.

Re:How much is too much? (2)

wierd_w (1375923) | about 2 years ago | (#41602735)

That isn't how I interpereted that... more, "no, they don't share the same 3 million. They EACH get 3 million."

See for instance the "50k split between 800 artists" post.

Re:How much is too much? (2)

tompaulco (629533) | about 2 years ago | (#41603185)

Drake and Wayne, good on you.
I guess they must get paid more for the people who specifically ask not to have to hear them.

Re:How much is too much? (1)

Mabhatter (126906) | about 2 years ago | (#41603349)

Of course the ARTIST gets ... ZILCH...

this money is paid to ASCAP & BMI, and double that is paid to Sound Exchange. After accounting fees, hooker fees, blow fees, that fees, radio payload fees.... Artists get 52 cents...

Re:How much is too much? (1)

Mabhatter (126906) | about 2 years ago | (#41603411)

More than that I'd guarantee #799 having $50k paid in royalties ISN'T SEEING A DIME because all the royalty money get thrown in a big hat at Sound Exchange, then the fees come out, then they cut ALL of it by plays, which means anybody not on commercial radio gets a sliver... It's calculated "en masse" not by what some individual station paid in... So that $50k goes "poof!"

THEN t#799's label and agent get paid FIRST.... So get gets $1... Less the stamp.

How much is enough? (1)

Fred Ferrigno (122319) | about 2 years ago | (#41603979)

If you told the young Aubrey Drake Graham that someday he'd be making "only" $1 million a year as a musician, he'd probably be thrilled.

Its just the labels scared of loosing control (1)

bobjr94 (1120555) | about 2 years ago | (#41602547)

There are thousands of small internet radio stations, many make no profits or even loose money and they are suppose to pay artists and labels huge payments. Many of these kind of stations play independent artists and they don't even receive any of they money paid back to the recording artists unions. It's just a overly burdensome tax trying to prevent small internet broadcasters from existing and pulling listeners away from top 40 radio. Of course the simple fix, when stations are finally discovered and told to pay royalties, they just move their streaming location to some off shore web hosting company. They are then exempt from this US law.

Pandora's problem (4, Insightful)

girlintraining (1395911) | about 2 years ago | (#41602581)

Pandora's problem is that they're cutting out the middlemen. Middlemen tend not to like that very much, especially given that most of the people in our economy are one kind of middleman or another. Money directly to people working? That's unamerican. That's communism. That's... well, you get the idea.

Copyright law exists principally for one reason anymore these days: Middlemen. Oh sure, they talk about the artists, but there's no such thing as an artist under copyright law anymore. They're all contractors -- and their art actually isn't art anymore, they're "works for hire". I shouldn't have to explain how RIAA fucks artists, but for those who've been living under a rock until just now, let me give you a hint: It starts with a 'c', ends with a 't', and has a lot of legal language in between that says you (the artist) brings the lube, and they bring the butt hurt. Oh, and don't bother trying to look elsewhere: It's exclusive. Just you and me baby. And it will not be over quickly. And you will not enjoy it.

Re:Pandora's problem (0)

Anonymous Coward | about 2 years ago | (#41602773)

It's jsut new middlemen. Instead of NARM (National Association of Recording Merchandisers) getting the middleman cut now it's IT workers at Pandora ans ISPs. The new guys need better lobying.

Re:Pandora's problem (1)

utkonos (2104836) | about 2 years ago | (#41604347)

Not just new middlemen, they are more fair middlemen. Unfortunately, except for within a city, I don't think there can be an option of "no middlemen." There will always be some type of content distribution, and the artists themselves are writing music not doing content distribution.

Re:Pandora's problem (2)

Crypto Gnome (651401) | about 2 years ago | (#41603025)

It starts with a 'c', ends with a 't', and has a lot of legal language in between that says you (the artist) brings the lube, and they bring the butt hurt. Oh, and don't bother trying to look elsewhere: It's exclusive. Just you and me baby. And it will not be over quickly. And you will not enjoy it.

You say that like it's a bad thing.

Some people search long and hard to find videoclips like that, AND they're often happy to pay-per-view.

Re:Pandora's problem (1)

girlintraining (1395911) | about 2 years ago | (#41603135)

Some people search long and hard to find videoclips like that, AND they're often happy to pay-per-view.

I can understand people rubbing one out looking at pictures of the artists... but a record company executive? It should be illegal, and anyone caught with the pictures punished... for cruelty to camera lenses.

Re:Pandora's problem (3, Insightful)

artor3 (1344997) | about 2 years ago | (#41603437)

You do understand that without copyright, Pandora wouldn't give a single dime to the artists, right? Pandora is a business. They're not in the habit of giving away millions of dollars when they're not legally obligated to.

Re:Pandora's problem (3, Interesting)

girlintraining (1395911) | about 2 years ago | (#41604365)

You do understand that without copyright, Pandora wouldn't give a single dime to the artists, right? Pandora is a business. They're not in the habit of giving away millions of dollars when they're not legally obligated to.

Why is there always That Guy(tm) who assumes that when someone disagrees with a particular instance of something, That Guy(tm) assumes they don't like all instances of the thing, and then goes on to do a reducto ad absurdum argument. Dude, let me be clear: I'm not against copyright, I'm against the copyright system we have today. Copyright should not last 150 years plus the life of the author. It shouldn't have billion trillion dollar fines with plenty of rape in prison tacked on for trivial amounts of actual damage. The list of epic fail can be continued almost indefinately... but that doesn't mean I don't support compensating artists' for their work, it means the system as it exists today is crap.

Re:Pandora's problem (1)

artor3 (1344997) | about 2 years ago | (#41604505)

I apologize then. There are plenty of people on this site who DO think that copyright should not exist in any form, so when your description of copyright involves a protracted anal rape analogy, I tend to lump you in with the crazies.

Re:Pandora's problem (-1)

Anonymous Coward | about 2 years ago | (#41604701)

don't apologize, that bitch is crazy and ignorant.

Re:Pandora's problem (0)

Anonymous Coward | about 2 years ago | (#41603735)

I'm sorry but you are naively uninformed.

they pay this via sound exchange, which is a middle man for the middle man!

riaa is way ahead of you.

Um... awesome! (2)

liquidhokie (2044274) | about 2 years ago | (#41602879)

Excellent news! This article cites real, unassailable numbers-- much of them in *dollars*. There is ample statistical basis to draw many, many well founded conclusions. These conclusions will affect many types of business, economic models, political systems, artistic expressions, and maybe even sports. I would humbly suggest that every single one of those conclusions bodes well for the careers of (stereo)typical readers of this site.

Enjoy!

Go Pandora! (0)

Anonymous Coward | about 2 years ago | (#41603335)

Pandora is the shit. Once you build up a couple stations with some artist seeds and some likes and dislikes, it can find you some really cool stuff. I found several of my now favorite bands this way. I have one station for rock/metal and one for hip-hop. Mixing the two makes for a nice every-other-one experience with a decent balance of new stuff and old favorites.

I was never really happy with the web interface, but it's better now since they moved away from Flash. Linux users should check out Pithos, a simple and lightweight GTK Pandora client. The best thing about it is it shows the next few songs in the playlist so you know what's coming up (plus no ads plus unlimited skip). The day I started using Pithos was the day I signed up for a year of Pandora One. The official Android client's not too bad either.

I'm not really one to buy music; Pandora has saved me a lot of torrenting. There's no way I could afford to buy albums from all my favorites, so nice to know that for my $36/year the musicians will get at least something for their troubles.

Meanwhile... (4, Interesting)

Nemyst (1383049) | about 2 years ago | (#41603511)

Dear Pandora Visitor,

We are deeply, deeply sorry to say that due to licensing constraints, we can no longer allow access to Pandora for listeners located outside of the U.S. We will continue to work diligently to realize the vision of a truly global Pandora, but for the time being we are required to restrict its use. We are very sad to have to do this, but there is no other alternative.

Pandora's biggest issue is that they're still blocking everyone outside of the US. When they finally wake up, the entire market will already be taken by other players like Last.fm or Spotify, which is a shame because Pandora does seem like a nice service.

Re:Meanwhile... (2)

Drishmung (458368) | about 2 years ago | (#41604389)

Pandora's biggest issue is that they're still blocking everyone outside of the US.

Not everyone any more. According to wikipedia [wikipedia.org] , Pandora is now available in Australia [gizmodo.com.au] and New Zealand [pcworld.co.nz] . They apparently negotiated deals with the local licensing bodies.

Re:Meanwhile... (0)

Anonymous Coward | about 2 years ago | (#41604845)

On a technical note you can circumvent the block by using Tor and setting it up so that it only uses exit nodes in the US. They've set up the location based blocking so that you need to load the website through Tor, but you can pull the audio files directly from the server. That way the low bandwidth of Tor isn't a problem. FoxyProxy handles this nicely.

It also creates a interesting moral / legal problem. Is it wrong to pay for Pandora One if I'm listening from a country where Pandora is blocked? Am I paying for illegal content even though the money is going to the artists?

And yeah, it's a real shame Pandora isn't available outside the US. It's the best music service I know by a wide margin.

Regarding the Summary (1)

brit74 (831798) | about 2 years ago | (#41604831)

"Congress must stop the discrimination against internet radio and allow it to operate on a level playing field, under the same rules as other forms of digital radio.'"

I had to wonder about this quote at the end. Most of the summary talks about how musicians are earning money from Pandora, but Pandora then says that they want the fees lowered for internet radio so that they (wait for it) can pay less money to the musicians. It was just weird. It was like "Hey! Look how much money were giving to the artists!" followed with "um, could we pass legislation to lower how much we pay them"? I'm not actually saying that the fees shouldn't be lowered. It's just a weird flip that they make. I've also heard that musicians aren't terribly happy with the cut they get from stuff like radio.

Also, the summary states, "Over 2,000 different artists will pull in $10,000 or more in the next year, and 800 will get paid over $50,000.", but I had to wonder how many ways that money gets split. For example, if we ignored the middle-men (i.e. labels) and the money was split between four band members and one manager, you've split the money five ways. If 2,000 artists are pulling in over $10,000 next year -- well, assuming the low-end of $10,000, that works out to $2,000 per person per year. When you consider the costs of recording the music in the first place, that really isn't much. Admittedly, there are other revenue streams for musicians, so I'm agnostic about the question of how much money musicians should earn when radio/internet radio wants to stream their music.

Grupo Bryndis, who has a sales rank on Amazon of 183,187 (in other words, who is not at all a household name), is on track to receive $114,192.

My first thought on reading this was that there's some error. Pandora states that 800 musicians get paid over $50,000 - that means that Grupo Bryndis has to be in the top 800 musicians - probably somewhere around the 400th highest paid artist on Pandora - even though he's ranked 183,187 on Amazon? Well, Grupo Bryndis is a Mexican band ( "Grupo Bryndis is an internationally known Mexican musical group... Grupo Bryndis is also a Latin Grammy Award winner for best album in 2007." http://en.wikipedia.org/wiki/Grupo_Bryndis [wikipedia.org] ) - of course they're not a household name to Americans or Europeans. If they're getting that much money from Pandora, I'd bet that the group is a household name in Mexico, though. I'd also bet the gap between the Amazon sales rank and Pandora's rank is a reflection of their fanbase - since it's a Mexican band and his Mexicans listeners (because they tend to be poor) probably look for lower-cost alternatives to buying, or maybe the Venn-Diagram intersection between Amazon customers and Grupo Bryndis listeners is small (perhaps Amazon isn't popular in Mexico).

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