
What Pandora Pays Top Artists - alexshipillo
http://blog.pandora.com/pandora/archives/2012/10/pandora-and-art.html
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pasbesoin
Pandora: Is there a reason the image on this blog post is so large? This one
image, resized in the browser to 300x200, is consuming 2+ MB.

Namely, this one:

    
    
        <img alt="tim-map.jpg" src="http://blog.pandora.com/pandora/tim-map.jpg" width="300" height="200" class="mt-image-right" style="float: right; margin: 0 0 20px 20px;" />
    

I've been noticing the resurgence of browser-based resizing of large images on
a few different business blogs/formats, recently. In this case (and some
others), the resize is to much less than 1/4 the original, so I'm thinking
it's not a "Retina" thing.

Maybe it's just convenience for the company/blogger, not bothering to resize.
But then, every access is a 2+ MB hit -- which is how I noticed it -- both for
you, and for the viewer, which may particularly impact mobile viewers and
others on limited bandwidth connections.

~~~
MiguelHudnandez
This happens all the time, all over the web. It's because interns or non-
webdev staff often don't know they should resize a file before uploading it
and attaching it to a post. So they'll upload a JPG right from a camera's
memory card and use the WYSIWYG editor to set its dimensions. The worst are
when images like this are referenced within broadcast e-mail messages. Luckily
you can swap the file out on disk without inconveniencing future readers.

I wrote an image API at my place of work to take a file by name and accept
dimensions in the query string. It resizes the image, caches the file on disk,
at and serves the smaller file. However, it's tough to integrate that API with
every little WYSIWYG editor we have, so sometimes we still serve up large
files in this way.

Usually, intentional retina-quality images have plenty of telltale signs (like
the @2x naming convention).

~~~
anigbrowl
_don't know they should resize a file before uploading it and attaching it to
a post_

That's a job for a computer, not a human. It's a waste of an editor's time to
dwell on such details, just as it's a waste of a newspaper editor's time to
worry about the ink in the printing machines.

~~~
mike-cardwell
Googles mod_pagespeed for Apache does dynamic resizing of images.

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guelo
The RIAA takes all of Pandora's profits[1]. I think if they were smart they
would back off and give Pandora a little breathing room to invest in marketing
and tech.

[1]
[http://www.google.com/finance?q=NYSE%3AP&fstype=ii&e...](http://www.google.com/finance?q=NYSE%3AP&fstype=ii&ei=pZl0ULj4M4iViAKwlwE)

~~~
mayneack
For those of us not used to reading something like this, can you explain? Is
the RIAA somewhere in here: "Selling/General/Admin. Expenses, Total"?

~~~
Sam_Odio
I downloaded their detailed income statements[0]. The Google Finance income
statement appears to be wrong. Google's income statements imply royalties of
less than 8.5%.

In their latest quarter (Q2 FY2013) "Cost of Revenue" made up $68,036,000 on
revenue of $101,267,000. Of that, "Content acquisition costs" were $60,522.
That means royalties make up a whopping _60% of all revenue._ They're not
making a profit and have lost money in FY2012 and FY2011.

0\.
[http://investor.pandora.com/phoenix.zhtml?c=227956&p=iro...](http://investor.pandora.com/phoenix.zhtml?c=227956&p=irol-
irhome) (see Historical Financials).

~~~
forgotusername
A few weeks back Google Finance was reporting GOOG's _own_ earnings
incorrectly. Most people with interest in such things recommend avoiding it
like the plague

------
dkrich
I use Pandora and love the product. But every time I see this commercial with
Tim Westergren where he states that the royalty system for internet radio is
"deeply unfair" I can't help but wonder why he believes that to be true.

Where is it written that all distributors should pay the same price for their
wares? Wal-Mart pays Proctor and Gamble a significantly lower cost than small
grocers. Why? Because Wal-Mart, quite frankly, has P&G by the balls. Yet Wal-
Mart is the source of more revenue for P&G than any other distributor, so they
earn the right.

Now I realize that Pandora is the exact opposite- the distributor has no
leverage, but I believe the same principle applies. There is absolutely no
reason that distributors should be treated equally. Competition varies widely
across different distribution channels. If Pandora can't operate at a profit,
I don't believe it is incumbent on the artists to make way for their
sustainability.

~~~
thasmin
The difference is that your example is in a free market and music royalty
rates are controlled by Congress.

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rayiner
Music royalty rates are not set by Congress. The Copyright Royalty Board sets
rates for compulsory licensing. These are licenses copyright holders have to
agree to for certain uses.

Nothing stops Pandora from negotiating regular licenses with content
producers. Pandora doesn't do it because they'd get a worse deal that way.

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imtyler
This is probably going to end up being a controversial opinion, but I just
don't think music is worth that much anymore (fiscally speaking). Sure, there
was a time when being popular meant signing a contract-- it was the only way
to distribute your music on a large scale. Radio and physical copies were the
only way to hear music, period. But these days with the internet and the right
software practically anyone can create and distribute high quality
professional sounding music. It's just not that difficult anymore, and I don't
think it justifies such a steep price tag. Could there be such thing as a
"music bubble"?

~~~
jimmar
Give me all of the top music software in the world and I won't be able to
create anything worth listening to. Your statement is kind of like saying
since word processing software and electronic distribution are widely
available, books really aren't worth the price tag. It's the creativity and
hard work that goes into books and music that makes it worth the price--not
the cost of the distribution medium.

~~~
stickfigure
_Give me all of the top music software in the world and I won't be able to
create anything worth listening to._

Perhaps this is a slight tangent, but are you sure about that? It seems
daunting now, but that's probably because you're at the rock bottom of the
learning curve. I'll bet there has been more than one brilliant musician who's
looked at their sequencing software and thought "I could never write this". I
don't mean to suggest that there's a Mozart inside everyone, but I don't see
why we couldn't teach musical literacy as "easily" as we teach programming.
Music Engineering 101?

Maybe more to the parent's point, it's also possible that it doesn't require a
Mozart to make a popular song today. PSY's Gangnam Style is clever and fun but
if you turn off the video and don't understand the lyrics, the music is
basically sampled from 90s trance hits. You could make a similar argument for
Lady Gaga. The major _creativity_ seems to be something layered on top of the
music. How notable would OK Go be without the brilliant videos? Yes yes, I
love their music too - but there's a _lot_ of great indie rock out there.

Maybe there is a supply/demand curve for music. It's an interesting
perspective that I have never heard before. Also consider: Old music doesn't
"expire", so as new music is created, it increases the total supply. New bands
are not only competing with each other, they're competing with every band that
has ever released music.

~~~
fumar
I agree that several of today's top performers are rehash 90's trance and euro
dance. It honestly makes me laugh. I remember making similar music on Fruity
Loops with Sonic Foundry Acid Pro as a kid. I had a midi keyboard and crappy
monitors.

Creating digital music does have a learning curve...I had a rudimentary
knowledge of music. I took a year of piano lessons. I could imitate some of
the music I liked. The hardest part was creating something unique. I could be
proud of.

Sequencing will always be fun for me. I have amassed some cool toys over the
years. It is nothing more than a hobby.

Soundcloud is like a musicians github.

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steve19
An artist with a sales rank of 17,000 on Amazon is making $138,567 on Pandora!
Wow!

I wonder how much Pandora makes (or loses) on that artist.

~~~
earbitscom
That's because Pandora only has about a million songs in their catalog, where
iTunes has like 30 million. All Pandora has to do, and you better believe they
did in order to write an article like this, is classify an unknown artist that
sounds like Coldplay into the system. If you've experienced Pandora, you know
that after a few weeks you hear the same music over and over on any given
channel. Suffice it to say, across millions of artists and hundreds of genres,
one relatively unknown artist with a lot in common with a massive artist is
going to be played for a shit load of people a fuck load of times.

If you divide total Pandora royalties by the number of artists in the catalog,
you'll realize that these "unknown" artists they're showcasing are outliers by
a huge margin, and probably put into rotation just for a publicity purpose
like this.

edit: spelling

~~~
joelrunyon
How many total artists do those million songs translate into?

~~~
earbitscom
They tend to classify whole albums, which would be an average of 10 songs. So,
100,000 albums. Of that, there are going to be some artists with multiple
albums. You can probably estimate about 70k-80k.

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simondlr
That seems more than I expected? Then again, don't quite know what the going
for streaming revenue is.

~~~
waterlesscloud
I wonder if it's the amount that gets paid to the label, and then the artist
gets a fraction of that?

~~~
rationalbeats
No it is sent to Soundexchange, and is split 50/50 with artist and label. It
is the performance royalty.

It is a different royalty than publishing royalty which is BMI/ASCAP and those
monies are sent directly to the label and they decide how to dole it out.

FYI terrestrial radio pay's 0% of revenue for performance royalties, Satellite
Radio pays about 8% of revenue and Pandora pays around 50%

This unfair system of royalty payments were set up by the RIAA mafia in the
mid 90's to discourage Internet radio since it would be a direct competitor to
the old guard.

That is why there is current legislation introduced 4 weeks ago to bring
parity to the royalty system. Why should a song that is played on FM radio pay
a different set of royalties than one played on Satellite or one streamed on
the Internet?

I personally have received several checks from internet streaming, for some
big hit songs I played on as a session musician, yet those same songs, which
were played tens of millions of times on terrestrial radio, paid me NOTHING,
because terrestrial radio does not pay performance royalties.

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sopooneo
If they wanted, could Pandora avoid interacting with record companies
completely? That is, only buy music direct from artists? And if they did this,
could they then just negotiate whatever deals they wanted with the artists?

I am not implying that this would be economically feasible for them, just
curious if there is any reason it absolutely couldn't be done

~~~
derekp7
The problem is that most artists that the majority of people want to listen to
have already signed exclusive contracts with one of the record labels. And
they did that because of the initial value of promotion by the record label
(it's almost impossible to get radio airplay without a record label).

~~~
burrokeet
They signed with a label because of the advance first and foremost.

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dorkrawk
I wonder what % of each artist's total income these Pandora numbers represent.
Is Pandora (or any other streaming service) a sustaining financial source for
many of these artists when compared to music sales, touring, licencing, etc.
or is it just a drop in the bucket?

~~~
earbitscom
The primary factors in this are how much they get played, whether they're on a
label, and how many people are in their band. The performance royalty is based
on number of streams, split 50% to the label, then 50% cut between all
performers on the recording. A 10-piece band of percussionists, on a label,
getting played in new age isn't going to make much.

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jonathanjaeger
A middle class living (depending on how many ways it's split) as just one
source of revenue isn't a bad deal. Not to mention there's a promotional
aspect to streaming on Pandora as well.

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donebizkit
Kudos to Tim Westergren for sticking to the fight after all these years. Good
luck Pandora.

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tehwebguy
Very interesting, but the way they contrast French Montana and Drake / Wayne
is a little misleading.

French is blowing up right now because of "Pop That", current #2 hip-hop
single that features Rick Ross, Drake and Wayne.

Not trying to put French or Pandora down, but his JV deal with Maybach Music
Group and the six figures that it usually costs to get the current top 2
rappers on his track probably have more to do with those royalties than
Pandora right now.

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RobotCaleb
I dislike Pandora and much prefer Grooveshark. I'd like to see Grooveshark
make a similar post, but I have a feeling it'd leave me sad.

~~~
rthomas6
What about Spotify? Spotify seems like a better Grooveshark, to me.

~~~
RobotCaleb
Last I checked Spotify required a Facebook login. I deleted my account a
couple of years ago.

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lylemckeany
With stories like this and the recent Rdio announcement
(<http://www.engadget.com/2012/10/02/rdio-artist-commission/>), I kind of wish
I was still a professional musician.

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kahawe
Great...

" _We are deeply, deeply sorry to say that due to licensing constraints, we
can no longer allow access to Pandora for listeners located outside of the
U.S._ "

I long for the day when these prehistoric business and licensing models are
finally burned to the ground and I can just spend my hard-earned money on
music and motion-pictures without having to worry which country I am in and
which country the song or movie is from.

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fakeer
I doubt the font size of Pandora blog is to save space. Whatever. It's a pain
the eyes anyway.

