Pandora: A Change in Priorities
So you’re an independent recording artist, casting about everywhere you can for airplay and exposure. Pandora, the internet-radio service with the taste-smart music library, has just accepted one of your original recordings for rotation. Great, right? Pandora provides access to your music on one of the most talked-about music platforms out there. It’s a step in the right direction, a win.
Except it isn’t anymore.
Like a lot of music services, Pandora began as an artist-friendly start-up, armed with ideas about rewriting the dirty rulebook of commercial radio. Spawned by the Music Genome Project in 2000, it sought to broaden listening options, and to promote musical discovery by linking similar musical traits. In 2007, it accepted guidance on artist royalty payments from SoundExchange. And it remained, at that time, privately held.
A privately held company tends to focus on its mission, as mission is the foundation of its strategic plan and business objectives. When a company goes public, as Pandora did with a $100-million IPO in 2011, its priorities change.
A publicly traded company can’t always afford a start-up’s idealism. Investors are focused on market performance, not artistic utopia. Every expense on a profit-and-loss statement — staff, facilities, research and development, artist and label royalties — is subject to review and reduction. When evaluating performance, investors value and protect a company’s mission most when it feeds financial success.
Enter the proposed Internet Radio Fairness Act (IRFA, H.R. 6480/S. 3609), enthusiastically supported by Pandora co-founder Tim Westergren. Despite the IRFA’s nod to “fairness,” the Act will, if enacted, reduce royalty payments to artists by more than 80 percent. Pandora supports the IRFA not because it sees the existing royalty structure as unfair, but because it sees the structure as insufficiently profitable for its particular business.
This is hardly complicated or surprising, but Pandora is no longer promoting economic opportunity for artists. Instead it is preying on them. It recently sued the American Society of Composers, Authors and Publishers (ASCAP) to reduce the royalties the performing rights organization collects for artists. Why? Because Pandora doesn’t like artists having a say in the rates at which they’re paid.
There can be little doubt now that artist royalties have been targeted as revenue by music-streaming services. Just as the major labels have traditionally left crumbs to artists, technology companies, many of whom are not even involved in the work of creating music, are now trying to bleed artists by undercutting royalties. Pandora is casting the artist not as its partner in distribution, but as its adversary.
As Westergren wrote recently, “Making performance fees fair for internet radio will drive massive investment in the space, accelerating the growth of the overall sector, and just as importantly accelerating the development of new technology that leverages the incredible power of the internet to build and activate new audiences. That’s where the great opportunity lies in the long run.”
What part of that is about music and artists?
Don’t be fooled by Pandora’s calls to support IRFA — unless, of course, you think the growth of music-streaming services is more important than music.
Which side are you on? Leave it in the comments below.
Tags: artist royalties, ASCAP, change, commercial radio, indie, indie artist, indie artists, indie music, internet radio, internet radio fairness act, IRFA, music genome project, music platform, music streaming, pandora, pandora music, pandora radio, recording, recording artist, royalties, royalty payments, royalty rates, soundexchange, tim westergren