Last month, Internet radio service Pandora ramped up their campaign encouraging listeners to lobby Congress to reduce their royalty rates. Utilizing a dual strategy that has continued into October, Pandora has showcased the significant revenue they are apparently delivering to artists and record labels while claiming that their growing royalty obligations, which are government mandated, are unsustainable and may ultimately put them out of business.
Yet, one constituent – the songwriter – is largely left absent from the dialogue. And with good reason: the ratio of artist to songwriter royalties that Pandora pays is the lowest of any income type in the music business. According to figures provided by the National Music Publishers Association, for every dollar that Pandora pays to artists and labels, they pay just 8 cents to songwriters and their music publishers.
Compare this to other popular digital services such as iTunes downloads or Spotify streams, where songwriters and publishers receive 15 cents and 17.6 cents to the dollar respectively. With YouTube, the ratio is at 42 cents and satellite radio comes in at 50 cents on the dollar. These numbers clearly illustrate why songwriters aren’t singing along to Pandora’s new tune.
Why aren’t songwriters getting a better deal? Quite simply: leverage.
Read the rest after the jump! [AlLindstrom]