Have you heard of Donnie McClurkin, French Montana or Grupo Bryndis? If you haven’t you’re not alone. They are artists whose sales ranks on Amazon are 4,752, 17,000 and 183,187, respectively. These are all working artists who live well outside the mainstream – no steady rotation on broadcast radio, no high profile opening slots on major tours, no front page placement in online retail. What they also have in common is a steady income from Pandora. In the next twelve months Pandora is on track to pay performance fees of $100,228, $138,567 and $114,192, respectively, for the music we play to their large and fast-growing audiences on Pandora.

tim-map.jpgAnd that’s just the tip of the iceberg. For over two thousand artists Pandora will pay over $10,000 dollars each over the next 12 months (including one of my favorites, the late jazz pianist Oscar Peterson), and for more than 800 we’ll pay over $50,000, more than the income of the average American household. For top earners like Coldplay, Adele, Wiz Khalifa, Jason Aldean and others Pandora is already paying over $1 million each. Drake and Lil Wayne are fast approaching a $3 million annual rate each.

This revenue stream is meaningful. I remember the many years I spent in a band when earning an additional thousand dollars a month would have been the difference between making music an avocation and a hobby. We’re talking here about the very real possibility of creating, for the first time ever, an actual musicians middle class.

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.

Pandora was founded on the principle of supporting artists and we’re proud to pay performance fees. We think artists could and should ultimately earn even more. But all of this revenue is coming from a single company. A predatory licensing fee orchestrated over ten years ago by the RIAA and their lobbyists in Washington has devastated internet radio. Few now deem it worthy of major investment, including most notably, virtually every major broadcaster. After spending years building an audience, the original three largest webcasters (AOL, Yahoo! LaunchCast and MSN) fled the business after the last rate hike was imposed. This is not a recipe for a sustainable industry. It is a destructive stranglehold that is putting at risk a much larger reward for musicians everywhere.

I believe we can do better, both for artists and music fans. Driven almost entirely by our commitment to this business, internet radio is now the fastest growing form of music listening in the US. And even more encouragingly it has proven to have a positive effect on both music sales and the curtailing of music piracy. In fact, Russ Crupnick, senior vice president of industry analysis for The NPD Group, citing the annual Music Acquisition Monitor study, states, “Overall music purchasing was down in the last year, while the average Pandora listener purchased 29% more music during the second quarter of 2012 compared with last year. Additionally, Pandora listeners’ music acquisition came increasingly from legal purchases, while non-listeners showed a decline.”

Consumers have spoken, and they love personalized radio. It has earned its place in the music ecosystem. It is time to embrace progress and harness this innovation for artists.

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.

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. The short-term reduction in revenue would be rapidly swamped by the overall growth of the sector. Imagine the impact on artists if this industry grew to become 25% or even 50% of radio listening.

Artists, this is your future. Own it.

Rascal Flatts ($670,351), Iron & Wine ($173,152), Bon Iver ($135,223), George Winston ($85,239), Zac Brown Band ($547,064), The Four Tops ($65,173), Ellie Goulding ($609,046), Mumford & Sons ($523,902)…

Tim
Founder, Pandora

Comments

  1. Dr. Manuel S. Alguero
    June 07, 2013 at 5:53pm
    I like the service. I would like it to last. I searched for the Pandora website to find if there was still a means to contribute. I would likely to make a financial contribution, It will be modest on my part since I am retired. All the same, it is great to have artists creating music for us all to enjoy. Since ours is a Capitalist society, lets pay.
    Reply
  2. Aairdancer
    June 17, 2013 at 10:18pm
    I still can't quite afford the fee, but so need music to get me thru! The fee seems SO reasonable and worth it, I'll luv it when no more adds. Now there are EVEN MORE adds now, and MORE OFTEN. And LOUDER and LONGER! INSIDIOUS. i'm hoping in 6 months. To be Ad-Free and support other artists/musicians is fair and worth it. But longer, louder and more ads now. As usual, when ya gots no flow ya gets no say. How are things re: that piece of legislation regarding industry use fees etc.? Tell em pay up!
    Reply
  3. Nicole Herrera
    June 26, 2013 at 11:45pm
    All of these services sound the same to me. They play the same music as FM radio and are always interrupting my studying with some commercial. I just found www.earbits.com the other day and they are totally free online radio without any ads. It's perfect music to work to.
    Reply
  4. fastest way to make can i make money as an artist
    April 04, 2014 at 1:08am
    So if you have ever asked yourself "What is the fastest way to make money. The real problem is the work that affiliates have to do before they can start promoting the free e - Book that come across and like. Whether you like it or not, the internet is the business weapon of today and it could be your best friend, if you treat it right.
    Reply
  5. Sohbet Hatları
    September 06, 2014 at 4:17am
    Curious to know if the artist contract is the same for the free with-ad service versus the paid One service. So far the value to upgrade is not significant enough to me. However, if there was an option to pay more to have some of my subscription pay more directly to the artist, I would do that because I’d feel like I was showing my appreciation directly to the artist. Just a thought.
    Reply
    1. Mike
      December 21, 2015 at 6:55am
      You're in luck, that's how the model is set up. The range is from $0.0014-$0.0025 per stream, from non-subscribers to subscribers. Obviously, I gave you a range because there may be a slight difference depending on the popularity of the artist.
      Reply
  6. limitsiz
    January 14, 2015 at 2:11pm
    I still can’t quite afford the fee, but so need music to get me thru! The fee seems SO reasonable and worth it, I’ll luv it when no more adds. Now there are EVEN MORE adds now, and MORE OFTEN. And LOUDER and LONGER! INSIDIOUS. i’m hoping in 6 months. To be Ad-Free and support other artists/musicians is fair and worth it. But longer, louder and more ads now. As usual, when ya gots no flow ya gets no say. How are things re: that piece of legislation regarding industry use fees etc.? Tell em pay up!
    Reply
  7. Rüya Tabirleri Sitesi
    February 08, 2015 at 5:05pm
    I like the service. I would like it to last. I searched for the Pandora website to find if there was still a means to contribute. I would likely to make a financial contribution, It will be modest on my part since I am retired. All the same, it is great to have artists creating music for us all to enjoy. Since ours is a Capitalist society, lets pay.
    Reply
  8. Mark Zyche
    July 11, 2015 at 9:57am
    THE ONLY people crying are the SIGNED HUGE artists that have bottle necked us all from access to making money and BLOCKED us from getting played on the radio all these years....So as to keep THEIR stock high. NOW PEOPLE ARE LISTENING TO PEOPLE THAT ARE NOT SIGNED!!! TOO BAD TAYLOR SWIFT!!! those fake 240 million hits on youtube dont fool anyone. NO ONE is buying your crap level produced dreck anymore. Once hip hop allowed the "non musician" to be able to "produce music" and give awards to people that cant even play "celebration" at a wedding, the value of the product dropped. You think the efforts required for a band like Earth wind and fire to band together and make songs was the same as Kanye? THE ABILITY for such a "musician" to call the shots also dropped. They cant even come to an awards celebration in a suit. they come dressed like they are the stage hands. Same with country artists. After a while all one had to do was place a hat on their head and sing about formula issues, and win on "the voice" and BOOM you understand heartland america! Listen, PANDORA ARTIST MAKE THE MONEY BECAUSE THEY ARE NOT PAYING AN INDUSTRY. so if you SIGNED ARTISTS ARE NOT GETTING PAID? you need to question that CORPORATION DRIVING THE GIANT CARS AND LIVING FAT OFF YOU ALL THIS TIME.
    Reply
  9. Mark Zyche
    July 11, 2015 at 10:00am
    did I see an "obama" reference?" would the racist please leave the rest of us alone...HE WON AND WON TWICE!!! AND YES HE IS BLACK. get over it. You ahd your opportunities for the last 6 years getting back at all the blacks you arrested and shot.
    Reply
  10. Mark Zyche
    July 11, 2015 at 10:01am
    I am proud to be on Pandora. they are the future.
    Reply

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