Judge Refuses to Alter Pandora’s Payments to Songwriters | Hacker News Reader

Judge Refuses to Alter Pandora’s Payments to Songwriters

nytimes.com

21 pointsjmgrosen14 comments

I'm frustrated that Pandora is fighting to pay less to the people who make the music we all love. The rates are already tiny relative to other sources of income for song writers.

I'm frustrated that ASCAP was angling for an arbitrarily larger percentage of revenue from Pandora based on going for nice looking numbers (2.5% retroactively for 2013, and 3% by 2015 in according to [1]).

But mostly I'm frustrated that congress and the courts are setting numbers when the market is perfectly capable of working this sort of thing out on its own. Legislation of terrestrial radio makes some sense given that the airwaves are allocated for public use. Internet radio is over pipes the government has no control over, though, except when the bits turn into music. Oh, and only when that music is chosen by someone other than the user. What?

[1] http://blogs.wsj.com/digits/2014/03/14/ruling-on-pandora-asc...

Don't be frustrated or mad. The more music there is, the less people are willing to pay per song. I listen to Pandora for free and I still feel like the value is limited.

More music = less value per track. Artists shouldn't take it personally, its just a saturated market.

I've just given up listening to large commercial music, and only listen to music that's uploaded to YouTube by smaller artists (often with free downloads).

I still have more to choose from than I could ever listen to, and haven't noticed any serious decrease in quality.

Agreed. There is a lot of really good stuff, especially internationally.

Thought you guys might sound good-willed. The arbitrary devaluing comparison of "arts" aka "enough good musics" out there, kind of craps on what good music consists of.

Yeah there's a real counterfactual here, of what could exist but doesn't due to the existing market forces.

oh, and what are we supposed to do, not listen to the good mudic people put out already, and not buy their CDs on amazon, and not go to their local concerts, and not buy their swag, because there are other, better artist who are not producing work because they haven't received a $250,000 advance on their contract?

No, those are all the right things to do. The problem is more about the indie musician who spends a few thousand dollars producing a collection of songs, only to be told to not even try to sell the cd, release the songs through a streaming service for hundredths of pennies per listen, and then expect to make their recording costs back through "touring and merchandise" while releasing their songs for basically-free as a "marketing expense", even while the market is saturated by other musicians that have bought into the same advice. The fan that actually makes a point to listen to the music, and buy the cd, and attend the local concert is a good fan, but the market forces are actually against that activity.

Would it better if, instead of $340M/year in royalties, they got $0? Because that's what they'll get if they raise the royalties to the point Pandora and other streaming radio goes out of business. Pandora operated at a net loss in 2013. And in 2012. And in 2011.

People are willing to pay a certain amount for radio, whether it's in subscription fees or putting up with a certain amount of ads per hour before tuning out. If that amount is less than the song writers demand, then they get nothing, because the exchange just won't happen. Pandora is fighting to pay what the market will bear so that this exchange does continue to happen and those writers continue to be paid for the music we all love.

This really misses something... it's written as if the consumers are somehow entitled to the music from the songwriters. Right now, musicians think streaming rates are too low, and the streaming services are operating at a loss. That basically means they are unsustainable, and that musicians are not willing to release their music at a rate the consumers want to pay. Because of debt financing, consumers are currently under the impression that they're entitled to this music anyway, but the gravy train might very well end, and then easy music enjoyment might become more scarce. For a lot of musicians, this would be a welcome development, as it would give the songwriters more options in how to control their revenue streams.

> Would it better if, instead of $340M/year in royalties, they got $0?

From the point of view of many artists, yes. Especially since the artists don't even see $34M/year out of that.

Most artists would rather that either A) their music not get distributed or B) that they distribute the music for free rather than enabling the current situation.

If A) Why are the releasing their music at all?

If B) Why are they not opting out of ASCAP, and in general only distributing it through channels that are free, then?

Happily, these are both options that some musicians are taking (presumably, in the case of the former). But not 'most'. Just some. I suspect 'most' simply want to make no effort in creating a new distribution model (I don't blame them, that's effort that is not going into making music), but also be paid more. But the change in technology has allowed people to want and expect to be able to listen to music from hundreds of artists, finding new stuff they like, and in general -explore- music more. The existing distribution model can't cope with that and make it as black and white, successful or failure, as it could when people either bought an entire album, or not, and there was no in between.

What is the value of listening to a single track, on an internet radio station, once every few weeks? "Hey, I had a million listens, I should be paid X for that!" Should you? Would any one of those people have been willing to pay $1 for that track? You don't know; there's ambiguity when the old distribution model is applied to the new digital listening patterns, that was never there when we ignored celestial radio, and only counted album sales.

Just to be clear, the 1.85% is not the sum total of the money Pandora "pays to the people who make the music". Pandora pays about 60% of their revenue in licensing fees.

Artists can opt out of ASCAP and Pandora arrangements if they like and negotiate whatever rates they want.

ASCAP and BMI formed a cartel in the 1940s to try to drive up prices by crushing alternative composers of music and driving them out of business. They succeeded and had to be brought under the anti-monopoly laws. Their legal troubles led to setting the official prices that Pandora pays.

It wasn't a free market when ASCAP was abusing it so the market arguably wasn't perfectly capable of working things out. I suspect that the market is capable today with our more open society and less cartel power from music publishers.

We'll find out if the market can handle things when independent artists abandon ASCAP for better royalty rates, if they ever do.

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