Pandora co-founder talks artist payments, future of Internet radio

By on October 10, 2012, 11:00 AM

Pandora co-founder Tim Westergren has penned a blog post outlining the revenue potential his service offers. He uses some hard data to highlight the fact that Internet radio can have a serious and positive impact on the music industry, but only if Congress allows it to operate on a level playing field governed by the same rules and regulations as other forms of digital radio.

To help drive his point home, Westergren profiles three artists that you’ve probably never heard of: Donnie McClurkin, French Montana and Grupo Bryndis. This trio of relative unknowns account for Amazon sales ranks of 4,752, 17,000 and 183,187, respectively. They receive no mainstream broadcast radio play, no high profile slots on major tours and no front page placement in online retail.

But according to the co-founder, these artists all have one thing in common – a steady and healthy revenue stream from Pandora. Over the next 12 months, the streaming music service anticipates paying performance fees of $100,228, $138,567 and $114,192, respectively. Most Americans would be more than happy with this level of income which can make a huge impact in the life of a struggling musician.

That’s only one example, Pandora says. They expect to pay over $10,000 to more than 2,000 artists over the next year while some 800 musicians will earn over $50,000 in the same time period.

Established artists like Adele, Coldplay, Jason Aldean and Wiz Khalifa are already earning more than $1 million each. Chart-toppers Drake and Lil Wayne are quickly approaching the $3 million annual mark – additional revenue that would be tough for anyone to turn down.

Pandora hopes to continue building on this success but they need some help to do so. As Westergren points out in his post, a predatory licensing fee established more than 10 years ago by the RIAA and their lobbyists has devastated Internet radio. The streaming service is seeking to make performance fees fair for all Internet radio, a move that has the potential to grow the industry by leaps and bounds.

User Comments: 5

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SCJake said:

More proof that the RIAA is dying... they made their billions. now its time for them to realize that the world is not permanent and they need to adapt... aka actually give money to the artists not take it all for themselves. Internet radio and youtube are probably the best things to happen to the music industry as now the artists dont need to shell out millions to get signed, make a cd, get promoted. They just need to sign up and be done

jizzyburnizzy said:

Pandora is old news. I enjoy spotify way more

Jim$ter said:

I have both Spotify and Pandora paid. I prefer Pandora because it actually works. Spotify radio works when it wants to and it's performance over 3G can suck. When I want good radio selection...Pandora is still hard to beat.

mevans336 mevans336 said:

Pandora is old news. I enjoy spotify way more

Slacker hands both their asses.

Trillionsin Trillionsin said:

Been with Slacker and Pandora. I prefer pandora... as noted by Jim$ter

but the article isnt about that, it's about Pandora being able to pay the artists more. Personally this seems like a great thing as popular as Pandora has become, there's an app for it on your TV, mobile device, Blu-ray player, Roku and other streaming players....

...some artists I had never heard of, and never would have heard of it not for Pandora. Ignorance is bliss, until you find out what you've been missing... now I have this urge to discover more artists that I may be missing out on simply because it isnt "mainstream."

Days are changing, and internet radio is becoming extremely popular. I dont have numbers to back up my opinions, but it should still be obvious I'm not completely wrong. We need to support Pandora (or your prefered online radio), and allow your favorite artists to get a better contribution.

It's not fair when an artist comes out with a simple yet catchy song, and earn millions, when there's others who work very hard and come out with more complex music and dont get paid as much....

...again, just an opinion. No facts have been stated in my comment.

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