Artist made only $2,700 in royalties from 43M plays on Pandora (2014) | Hacker News Reader

Artist made only $2,700 in royalties from 43M plays on Pandora (2014)

businessinsider.com

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2014 was before Pandora bought scraps of Rdio to build an on-demand platform from.

Royalties are complicated (and I'm only going to get the gist of it right), but Pandora uses DMCA rights to essentially act as a "radio station." That's why the interface is structured that way, and what artists holding out on Spotify can still be heard (when shuffled) on Pandora. Radio was always seen as promotional, and the royalties are really low, hence $2,700. On Spofity, this would be more like $160,000.

Do you mind explaining a bit more why this story is a problem? I assumed rightsholders would sign a contract with Pandora and it's their business what rate they negotiate. If they think it's too low, they can just not sign, can't they?

Apparently there's some government specified royalty for broadcasters, which includes Pandora, of $0.00176/play [1]. So maybe they're not allowed to demand more??!

[1] https://www.fool.com/investing/2017/02/28/will-pandora-media...

Flagged because that makes it sound like the $2700 was all he made. While in reality he made an order of magnitude more from it. It is just the part called "songwriter royalities" that was $2700.

You're right, I dropped the ball with the title, but unfortunately I can't edit it now.

Clarifying information for readers:

The original title of the article is: "Pharrell Made Only $2,700 In Songwriter Royalties From 43 Million Plays Of 'Happy' On Pandora"

Relevant quote describing the issue:

> Despite Pharrell's ubiquity, "Happy" made $2,700 in publisher and songwriter royalties from 43 million Pandora streams in the first quarter of 2014, according to an email from music publisher Sony/ATV CEO Marty Bandier obtained by Digital Music News.

Pandora's response (trimmed):

> ...However, we wish Mr. Bandier would provide the proper context and facts. Pandora is already the highest paying form of radio to both performers and songwriters. We have paid more than $1 billion to rights holders since our inception, which amounts to over half of all revenue we have generated. Regarding the specific songs he mentions in his letter, Pandora paid all rights holders more than $150,000 in just three months, substantially more than the $6,100 he suggests.

> The issue is not whether Pandora pays enough in royalties. The real issue is the financial dispute between labels and publishers about how to divide Pandora's industry-leading royalties. Mr. Bandier and his label peers (many of whom work within the same companies) are free to decide amongst themselves to change the split between songwriters and performing artists of the substantial royalty revenue already paid by Pandora. We'd also encourage that same group to provide transparency about how those dollars flow to the artists and songwriters.

Assuming the “happy” song was 5 minutes long, 47M plays ~ 5400 months of playtime. At $10/month subscription revenue, that’s $54k. So, the artist is getting 5% of the gross revenue. Not sure how that compares with radio/ satellite royalty streams.

Edit: It was 43M plays, not 47. So, ~ 5.4% of gross revenue.

You’re missing a multiplier there, the average of every users playtime/realtime fraction. Let’s generously assume that to be 10% (meaning every user listens for 2.4 hours every single day on average) and then it comes to 0.5%

That's low, but I'm curious as to how much was paid in total to the record company. Also, I wonder what artists think is fair to pay for a stream of a song?

> "According to industry analyst Michael DeGusta, Pharrell would likely have earned approximately $25,000 from the 43 million plays," Wile says.

2500000 / 43000000 = 0.0581395348837209 cents/play, or 1$ per 1720 plays

Unfortunately these articles never estimate the effective income per play for these services. Also the 1720 figure doesn't account for other people's cut outside of Pandora

> Regarding the specific songs he mentions in his letter, Pandora paid all rights holders more than $150,000 in just three months, substantially more than the $6,100 he suggests.

> The issue is not whether Pandora pays enough in royalties. The real issue is the financial dispute between labels and publishers about how to divide Pandora's industry-leading royalties.

Good catch, really the title of the article should be "Artist made only <$> from <Record Company> for 43M plays".

“"Happy" made $2,700 in publisher and songwriter royalties from 43 million Pandora streams in the first quarter of 2014, according to an email from music publisher Sony/ATV CEO Marty Bandier” -paragraph 2, italics mine; that’s $2700 to the publisher, who then gave some part of that to the artist.

But then paragraphs 4/5 say that “Fusion's Rob Wile points out that these numbers aren't all inclusive and don't include performance rights royalty rates, so Pharrell likely earned [...] approximately $25,000 from the 43 million plays”

And later on Pandora says that “Pandora paid all rights holders more than $150,000 in just three months [for “Happy” and anywhere from one to a half dozen other songs mentioned in the Sony CEO’s email, there is a lot of ambiguity here IMHO], substantially more than the $6,100 he suggests.”

There’s a pretty wide disparity in the numbers they are throwing around; if I am reading this all correctly then it seems that Sony may be saying “Sony and Pharrel got a few thousand bucks of royalties due to him as the composer of Happy” while ignoring that he also got about $150k of estimated royalties due to him as the performer of this specific recording of “Happy”, with an unspecified sum on top of that going to Sony and maybe various other people involved in arranging and producing the track.

Music royalties are really complicated.

Article is from 2014, and the year should be included in the title.

My bad, edited it now.

Wow, that's really high. While he was doing nothing, he got paid $2,700, what an enviable position.

Imagine if this mindset was applied to every minute a developer wasn't actually writing code...

Imagine if software companies paid their employees royalties on the code they wrote instead of just paying for the development time... ;-)

If you can negotiate it then a % of revenue or profit is totally doable as a consultant bringing additional millions to the table.

I feel an artist should be able to make a good living from their work.

Should they make 10s of millions, while LunchBox Joe gets sued into bankruptcy if he shares a few songs electronically? No, I don't think that's right, either.

It's time we re-thought artists rights in the electronic age.

Honest question, has an average Joe ever gotten sued into bankruptcy?

I'm definitely on your side here, just curious.

Yes. Here's a woman who was told to pay over $9000 per song for 24 songs she shared online.

http://www.startribune.com/ruling-stands-brainerd-woman-must...

Hard to feel sympathy for this. What is his hourly wage like $200/ hour?

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