
Artist made only $2,700 in royalties from 43M plays on Pandora (2014) - EndXA
https://www.businessinsider.com/pharrell-made-only-2700-in-songwriter-royalties-from-43-million-plays-of-happy-on-pandora-2014-12
======
dehrmann
2014 was before Pandora bought scraps of Rdio to build an on-demand platform
from.

Royalties are complicated (and I'm only going to get the gist of it right),
but Pandora uses DMCA rights to essentially act as a "radio station." That's
why the interface is structured that way, and what artists holding out on
Spotify can still be heard (when shuffled) on Pandora. Radio was always seen
as promotional, and the royalties are _really_ low, hence $2,700. On Spofity,
this would be more like $160,000.

~~~
lopmotr
Do you mind explaining a bit more why this story is a problem? I assumed
rightsholders would sign a contract with Pandora and it's their business what
rate they negotiate. If they think it's too low, they can just not sign, can't
they?

Apparently there's some government specified royalty for broadcasters, which
includes Pandora, of $0.00176/play [1]. So maybe they're not allowed to demand
more??!

[1] [https://www.fool.com/investing/2017/02/28/will-pandora-
media...](https://www.fool.com/investing/2017/02/28/will-pandora-media-ever-
turn-a-profit.aspx)

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TekMol
Flagged because that makes it sound like the $2700 was all he made. While in
reality he made an order of magnitude more from it. It is just the part called
"songwriter royalities" that was $2700.

~~~
EndXA
You're right, I dropped the ball with the title, but unfortunately I can't
edit it now.

Clarifying information for readers:

The original title of the article is: "Pharrell Made Only $2,700 In Songwriter
Royalties From 43 Million Plays Of 'Happy' On Pandora"

Relevant quote describing the issue:

> Despite Pharrell's ubiquity, "Happy" made $2,700 in publisher and songwriter
> royalties from 43 million Pandora streams in the first quarter of 2014,
> according to an email from music publisher Sony/ATV CEO Marty Bandier
> obtained by Digital Music News.

Pandora's response (trimmed):

> ...However, we wish Mr. Bandier would provide the proper context and facts.
> Pandora is already the highest paying form of radio to both performers and
> songwriters. We have paid more than $1 billion to rights holders since our
> inception, which amounts to over half of all revenue we have generated.
> Regarding the specific songs he mentions in his letter, Pandora paid all
> rights holders more than $150,000 in just three months, substantially more
> than the $6,100 he suggests.

> The issue is not whether Pandora pays enough in royalties. The real issue is
> the financial dispute between labels and publishers about how to divide
> Pandora's industry-leading royalties. Mr. Bandier and his label peers (many
> of whom work within the same companies) are free to decide amongst
> themselves to change the split between songwriters and performing artists of
> the substantial royalty revenue already paid by Pandora. We'd also encourage
> that same group to provide transparency about how those dollars flow to the
> artists and songwriters.

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yaalok
Assuming the “happy” song was 5 minutes long, 47M plays ~ 5400 months of
playtime. At $10/month subscription revenue, that’s $54k. So, the artist is
getting 5% of the gross revenue. Not sure how that compares with radio/
satellite royalty streams.

Edit: It was 43M plays, not 47. So, ~ 5.4% of gross revenue.

~~~
Swenrekcah
You’re missing a multiplier there, the average of every users
playtime/realtime fraction. Let’s generously assume that to be 10% (meaning
every user listens for 2.4 hours every single day on average) and then it
comes to 0.5%

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anderber
That's low, but I'm curious as to how much was paid in total to the record
company. Also, I wonder what artists think is fair to pay for a stream of a
song?

~~~
eesmith
> Regarding the specific songs he mentions in his letter, Pandora paid all
> rights holders more than $150,000 in just three months, substantially more
> than the $6,100 he suggests.

> The issue is not whether Pandora pays enough in royalties. The real issue is
> the financial dispute between labels and publishers about how to divide
> Pandora's industry-leading royalties.

~~~
anderber
Good catch, really the title of the article should be "Artist made only <$>
from <Record Company> for 43M plays".

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rahuldottech
Article is from 2014, and the year should be included in the title.

~~~
EndXA
My bad, edited it now.

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curyous
Wow, that's really high. While he was doing nothing, he got paid $2,700, what
an enviable position.

~~~
arkitaip
Imagine if this mindset was applied to every minute a developer wasn't
actually writing code...

~~~
musicale
Imagine if software companies paid their employees royalties on the code they
wrote instead of just paying for the development time... ;-)

~~~
pests
If you can negotiate it then a % of revenue or profit is totally doable as a
consultant bringing additional millions to the table.

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RickJWagner
I feel an artist should be able to make a good living from their work.

Should they make 10s of millions, while LunchBox Joe gets sued into bankruptcy
if he shares a few songs electronically? No, I don't think that's right,
either.

It's time we re-thought artists rights in the electronic age.

~~~
HeWhoLurksLate
Honest question, has an average Joe ever gotten sued into bankruptcy?

I'm definitely on your side here, just curious.

~~~
RickJWagner
Yes. Here's a woman who was told to pay over $9000 per song for 24 songs she
shared online.

[http://www.startribune.com/ruling-stands-brainerd-woman-
must...](http://www.startribune.com/ruling-stands-brainerd-woman-must-
pay-222-000-for-illegal-music-downloads/198858541/)

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ykevinator
Hard to feel sympathy for this. What is his hourly wage like $200/ hour?

