Pandora is no stranger to criticism when it comes to royalties, with some saying that it pays too little while the streaming radio service strives to gain lower fees. Back in November, for example, songwriter Ellen Shipley said a song she wrote was played 3.1 million times and earned her $39. A similar statement was made earlier this week by songwriter David Lowery, whose song was played 1 million times and earned a tad under $17. Pandora has responded in part to such claims, saying there are "falsehoods" that need cleared up.
The rather lengthy statement comes from Pandora's founder Tim Westergren, who discusses a couple different issues. The first concerns what Westergren says is a deliberate lie by the RIAA stating that Pandora wants to cut royalties to artists by 85-percent. The industry's "hired guns" then have continued to promote this alleged lie, doing so for the purpose of stirring up the music community and causing Pandora grief.
Pandora's founder says that the company has never made any such statements, and he goes further by challenging the RIAA to generate any proof to substantiate its claims. On the contrary, says Westergren - his company is seeking "solutions that would grow total payments to" artists. He then touches again on the issue of terrestrial radio stations, pointing out that they don't pay any royalties on the songs they play.
The second issue is regarding the claims by the artists that we mentioned above, in addition to some others that are similar. Westergren specifically mentions the latest claim, pointing readers to a third-party blog post that deconstruct's the songwriter's claims and shows math backing up a claim that, in reality, Pandora paid approximately $1,370 in total for the million plays, with a little over $200 of that going to the songwriter - not $16.89
That isn't the point, however, according to the statement. The point is that, in the larger picture, the way Pandora and regular radio stations operate are different, which can be distinguished between "spins" and "plays." A play on a radio station is one instance of a song that is provided to many listeners, while a spin is a song that is provided to a single user. For this reason, Pandora - under certain situations - could need millions of spins to equal the same song exposure as a single play on the radio.
For this reason, says Westergren, the royalty paid for a single spin is much lower than the royalty paid on a single play.
Wrapping it all up, the founder then went on to detail the rate hike it had to take under an agreement with ASCAP and BMI, which it agreed to and was then rejected from, followed by the withdrawal of publishers from ASCAP who then attempted to independently provide content to Pandora for higher fees. In part, this issue resulted in the company buying a terrestrial radio station called KXMZ.