Tuesday, June 25, 2013

1.1 million plays on Pandora equals a $16.89 check to the musician.

A battle is brewing in the online music business - this time Pandora is asking Congress to cut the rate that it has to pay in royalties to the artists who create the music that it streams.  This is ticking off a lot of people.

First of all, David Lowery (frontman from Cracker and Camper Van Beethoven a lecturer in Music Business at the University of GA) wrote that out of 1.1 million plays of the Cracker song "Low" in 1 quarter, he got a total of $16.89 in royalties.   The band in total got about $42.  Similar numbers exist for Spotify and Youtube.  As he puts it:

This is already a government mandated subsidy from songwriters and artists to Silicon Valley. Pandora wants to make it even worse.  (Yet another reason the government needs to get out of the business of setting webcasting rates and let the market sort it out.)

But Lowery is far from being a lone voice in this issue.  The remaining members of Pink Floyd wrote on the USA Today site that:

For almost all working musicians, it's also a question of economic survival. Nearly 90% of the artists who get a check for digital play receive less than $5,000 a year. They cannot afford the 85% pay cut Pandora asked Congress to impose on the music community.

As a rule - when Government sets prices in a market, it is the entity with the greatest lobbying power that gets the best deal.  In this case the online music streaming services are successfully using the Government to rip off the people who create the product that they stream.