Setting the Record Straight on Pandora

Here’s what you need to know:

  • Like most of you, we want Pandora to succeed, just like we want all new entrants into the music industry to succeed. In theory, when they do well, songwriters will do well too. We work hard to make sure any business that wants a music license is able to get one at a rate that’s fair to them and to our members. We don’t operate for a profit, and we don’t pick winners and losers in the marketplace. We look at how a business is using music to generate revenue and how much music it’s using overall in order to determine an appropriate licensing fee. We’ve negotiated deals with plenty of other music streaming companies and see no reason why Pandora should be entitled to special treatment. After all,<href=”#p1″>Pandora isn’t a struggling start-up anymore – it’s a Wall Street-traded company that is making millions of dollars streaming music created by songwriters and composers. They can and should pay a fair market rate.
  • Pandora has aggressively and consistently sought to pay songwriters and composers less than a fair market rate. In 2010, Pandora terminated their prior agreement with ASCAP, in order to lower their payments to songwriters and composers by moving from a usage-based license fee to a percentage of revenue license. Right now, even compared to other streaming companies, Pandora is paying very little for performance rights to the music that drives its business. In fact, every 1,000 plays of a song on Pandora is only worth about 8 cents to songwriters and composers. All told, it’s about 4% of their revenue. And yet, Pandora is going to great lengths to pay songwriters even less.
  • This debate has real consequences for songwriters and composers – and that’s why we’re fighting for you. In an effort to distract from the pennies it pays songwriters, Pandora is deliberately trying to conflate performance royalties (which go to songwriters, composers and publishers) with sound recording royalties (which go to artists and record labels). In a recent blog post, Pandora boss Tim Westergren even argued we shouldn’t even be talking about royalties, because the “value of a spin on Pandora is about much more.” That attitude is dismissive and insulting to songwriters whose livelihoods are at stake. Songwriters deserve better.

Our message to Pandora on behalf of our members is simple: Actions speak louder than words.

Punishing songwriters by refusing to pay fair value for their hard work and going so far as to take them to court, while their work is bringing in millions of dollars for your Wall Street investors, doesn’t sound like actions of a company “passionate about the future of music, and an ecosystem that allows those who create it to thrive.”

As every new platform for performing has music has emerged – from radio, to television, to cable, to the Internet and wireless platforms – we’ve worked hard to ensure that your music can reach new audiences and that you’re paid a fair rate for the value of your music. We intend to keep defending your right to be paid and treated fairly as streaming continues to evolve.

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