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Pandora Radio, streaming sites aren’t adding to music industry revenue

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Spotify allows listeners to stream music via the Internet. Credit: Courtesy of MCT

Spotify allows listeners to stream music via the Internet. Credit: Courtesy of MCT

Last fall, iTunes infamous holdouts ACDC finally succumbed and jumped onto the digital bandwagon, allowing fans to legally download the band’s music from iTunes for the first time ever. Others also finally fell to the temptation including Led Zeppelin, The Beatles and Metallica. Still, there are some full Garth Brooks albums you just can’t get on iTunes, which is the industry leader in digital downloads, trumping all competition with 75 percent of digital music sold, according to All Things D.

Music streaming options like Spotify, Pandora Radio, Groovesharkand others are slowly attempting to overthrow the digital music masters, but splitting the tiny 25 percent between so many options isn’t a bright outlook.

So when surviving members of Pink Floyd, Roger Waters, David Gilmour and Nick Mason, pulled together to write a pretty serious criticism in last Sunday’s USA Today of Pandora Radio’s attempt to cut musicians’ royalties, it just doesn’t appear as serious as the rockers made it seem. Especially factoring in that this isn’t the first time Pandora Radio has attempted to slash musician royalties (last year the company’s proposal was shot down after artists banded together), it just isn’t a serious threat quite yet. First off, it might not even pass, and secondly, it might not have that big of an impact.

“It’s a matter of principle for us. We hope that many online and mobile music services can give fans and artists the music they want…But those same services should fairly pay the artists and creators who make the music at the core of their businesses,” the USA Today commentary said.

Waters, Gilmour and Mason start off saying it’s a matter of principle, which I completely understand, and then move on to say “it’s also a question of economic survival,” which I don’t understand quite as much.

At the end of the day, musicians are the creators and should be paid their dues, but I also don’t think that Pandora Radio is bankrupting them either, especially for a band like Pink Floyd. The new Pandora Radio proposal would slash artist royalties by 85 percent, but 85 percent of what?

Artist David Lowery wrote that his song “Low” was played a whopping 1 million times on Pandora Radio, and his payoff was a whopping $16.89.

OK.

So you can do the exact math for yourself, but no matter what way you look at it, Lowery can’t lose more than $20 on this new Pandora Radio deal. It’s literally impossible. This case could be an extreme one, but all the same a bleak outlook for a musician looking to pack the bank with money made from Pandora.  

So why the freak out, Pink Floyd? Is it a matter of principle or a matter of economics? Clearly from these numbers, artists are barely making anything off of Pandora Radio as it is – this just isn’t where artists are making money. A Pink Floyd T-shirt on eBay would likely bring in more money than a million plays of “Wish You Were Here.” According toThe New York Times, musicians will make 7 to 10 cents for every 99 cent song bought on iTunes, and as the leader in digital downloads with 75 percent of the market, that’s where artists are going to make their money.

With every innovation in the way music changes hands (vinyl to CD to mp3 downloads to online streaming), musicians are up in arms about how will they make a living. Don’t artists deserve to be paid for what they make?

Yes, they do, they just don’t get paid in the same ways anymore. Concert sales, merchandise and other factors drive musicians paychecks, which is why it’s a moot point to argue over the Pandora Radio change.

Established artists will continue to sell millions of concert tickets a year. Struggling artists will continue to push overpriced T-shirts onto fans. The music industry business will continue to make money with or without Pandora Radio’s help. 

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