What Pandora Pays Top Artists • Hacker News Board

Re: What Pandora Pays Top Artists

#51

Post by daegloe » Wed, Oct 10, 2012, 12:50 AM UTC

earbitscom wrote: post #36

guelo wrote: post #14

The RIAA takes all of Pandora's profits[1]. I think if they were smart they would back off and give Pandora a little breathing room to invest in marketing and tech. [1] http://www.google.com/finance?q=NYSE%3AP&fstype=ii&e...

Actually, that's not very accurate. Those performance royalties are paid to SoundExchange, a non-profit assigned to distribute the royalties to the artists. The whole reason the labels hate Pandora is because it's the only massive service paying hundreds of millions of dollars directly to the performers, without filtering it through the labels' accounting departments.

That's correct, Pandora pays SoundExchange the statutory Interactive Streaming rate for the sound recording rights. SoundExchange in turn pays the appropriate rights holder. This might be an artist, directly, but often it's a record label. The labels don't like the revenue flowing through SoundExhange because the process is transparent to their artists. Which means they can't hide the money.

Pandora also pays the publishers for the performance right, separately from SoundExchange. This can be a fixed percentage of revenue. Societies like ASCAP, BMI, and SESAC generally administer the rights on behalf of the publishers.

Lastly, Pandora also pays Harry Fox Agency the statutory rate for the mechanical rights. HFA in turn pays the song writers.

Here's a good breakdown from an old and entertaining (view comments) TuneCore blog post: http://blog.tunecore.com/2012/03/the-additional-10-5-spotify...

Re: What Pandora Pays Top Artists

#52

Post by mtgx » Wed, Oct 10, 2012, 1:41 AM UTC

rm999 wrote: post #31

mayneack wrote: post #24

Earlier quoted context omitted.

For those of us not used to reading something like this, can you explain? Is the RIAA somewhere in here: "Selling/General/Admin. Expenses, Total"?

They have zero profit, so you could argue any single cost is taking away "all their profits". But I'm probably missing a more insightful point - maybe that the RIAA engineers the situation so that their margin is ~0.

Apple gets 30% from their music sales, and that still doesn't leave them with much. Let's just say the labels leave Pandora, Spotify and others with a lot less than 30%, which makes it very hard for them to operate their business, and if these services can't be sustainable and eventually start dying out, it will all because of the labels.

Re: What Pandora Pays Top Artists

#53

Post by smackfu » Wed, Oct 10, 2012, 2:17 AM UTC

pasbesoin wrote: post #16

Pandora: Is there a reason the image on this blog post is so large? This one image, resized in the browser to 300x200, is consuming 2+ MB. Namely, this one: I've been noticing the resurgence of browser-based resizing of large images on a few different business blogs/formats, recently. In this case (and some others), the resize is to much less than 1/4 the original, so I'm thinking it's not a "Retina" thing. Maybe it'…

You see this problem a lot when reading via a feed reader. Images end up huge because the style sheet that resizes them isn't in effect.

Re: What Pandora Pays Top Artists

#54

Post by fakeer » Wed, Oct 10, 2012, 2:25 AM UTC

I doubt the font size of Pandora blog is to save space. Whatever. It's a pain the eyes anyway.

Re: What Pandora Pays Top Artists

#55

Post by donebizkit » Wed, Oct 10, 2012, 2:41 AM UTC

Kudos to Tim Westergren for sticking to the fight after all these years. Good luck Pandora.

Re: What Pandora Pays Top Artists

#56

Post by RobotCaleb » Wed, Oct 10, 2012, 2:59 AM UTC

I dislike Pandora and much prefer Grooveshark. I'd like to see Grooveshark make a similar post, but I have a feeling it'd leave me sad.

Re: What Pandora Pays Top Artists

#57

Post by burrokeet » Wed, Oct 10, 2012, 2:59 AM UTC

derekp7 wrote: post #49

sopooneo wrote: post #46

If they wanted, could Pandora avoid interacting with record companies completely? That is, only buy music direct from artists? And if they did this, could they then just negotiate whatever deals they wanted with the artists? I am not implying that this would be economically feasible for them, just curious if there is any reason it absolutely couldn't be done

The problem is that most artists that the majority of people want to listen to have already signed exclusive contracts with one of the record labels. And they did that because of the initial value of promotion by the record label (it's almost impossible to get radio airplay without a record label).

They signed with a label because of the advance first and foremost.

Re: What Pandora Pays Top Artists

#58

Post by brianbreslin » Wed, Oct 10, 2012, 3:06 AM UTC

RobotCaleb wrote: post #56

I dislike Pandora and much prefer Grooveshark. I'd like to see Grooveshark make a similar post, but I have a feeling it'd leave me sad.

I always thought grooveshark was 1 step away from being sued into oblivion. Aren't they not paying royalties? I thought their excuse was the music content was uploaded by users.

Re: What Pandora Pays Top Artists

#59

Post by owenfi » Wed, Oct 10, 2012, 3:22 AM UTC

daegloe wrote: post #51

earbitscom wrote: post #36

Earlier quoted context omitted.

Actually, that's not very accurate. Those performance royalties are paid to SoundExchange, a non-profit assigned to distribute the royalties to the artists. The whole reason the labels hate Pandora is because it's the only massive service paying hundreds of millions of dollars directly to the performers, without filtering it through the labels' accounting departments.

That's correct, Pandora pays SoundExchange the statutory Interactive Streaming rate for the sound recording rights. SoundExchange in turn pays the appropriate rights holder. This might be an artist, directly, but often it's a record label. The labels don't like the revenue flowing through SoundExhange because the process is transparent to their artists. Which means they can't hide the money. Pandora also pays the pub…

Does Pandora have to pay mechanical rights to Harry Fox Agency? I thought that only applied to downloads (non-streaming).

Re: What Pandora Pays Top Artists

#60

Post by bathat » Wed, Oct 10, 2012, 3:30 AM UTC

jimmar wrote: post #19

imtyler wrote: post #13

This is probably going to end up being a controversial opinion, but I just don't think music is worth that much anymore (fiscally speaking). Sure, there was a time when being popular meant signing a contract-- it was the only way to distribute your music on a large scale. Radio and physical copies were the only way to hear music, period. But these days with the internet and the right software practically anyone can c…

Give me all of the top music software in the world and I won't be able to create anything worth listening to. Your statement is kind of like saying since word processing software and electronic distribution are widely available, books really aren't worth the price tag. It's the creativity and hard work that goes into books and music that makes it worth the price--not the cost of the distribution medium.

I think the point is not that music software enables you specifically would be able to produce worthwhile music, but that it enables many people who are musically talented to create and distribute their work. There is, of course, an implicit assumption that there are a large number of such gifted people, but that assumption may not be as outlandish as it first appears. I had many friends from high school marching band who earned pocket money playing at weddings and such, yet every single one gave up music by the time they graduated from college.

We all know that anecdotes are not data, but the legacy music distribution model seems to be optimized for using labor efficiently a case where fixed and marginal costs are higher than they currently are. It is far from obvious that those optimizations are good ones where the cost of recording equipment has dropped by orders of magnitude and the cost of distributing a single song is so low that people will do it for free.