I have been humbly reminded of the need to question the source of the information that I act upon.
A few days ago I came across an article citing some heart warming statistics about Internet radio and what a key source of income it has become for musical artists. The article reported how Pandora had paid performance fees in excess of $100,000 to fairly unknown artists. The author, Pandora’s founder Tim Westergren, went on to reminisce on his years in a band, and how important this type of revenue could be for amateur musical artists. I thought ‘Great! Good news for musicians, finally!’ and quickly shared it on Twitter – you can read the article here.
Later, twitter user @IntrotoMKT directed me to this article stating that a high proportion of the money goes to intermediaries, not the artists themselves. Artists could end up receiving as little as less than 5% of the revenue accrued through Pandora.
The key message of the original article – that Internet radio was a source of revenue for artists – was true. But the implied message – that it was delivering thousands or millions of dollars to artists – wasn’t. Shame on me for not questioning the impartiality of the source.
Ana Canhoto 
You have a point that it’s good to question the source. But… there’s also the fact that the system of royalties is a very, very murky one. Royalties are always paid to an intermediary organisation, that is country based. And it’s their job to pay it to the artist in question. But… they do not really need to do a lot of effort to find the artists. It’s up to the artist to connect with that organisation to collect his payments. For example: here in Latvia, the national collection oganisation collects these payments, but only advertises in Latvia that they have received and are looking for the artist in question. That is deemed to be enough action. If the artists don’t respond to that, the organisation can keep the royalties. So for example: if you write a book, and someone recites that on national radio in latvia, this organisation will collect money from that radio station, and collect royalties due for using your work in that way. Then, they will list you as someone entitled to payments (probably from a certain threshold amount) and make that public through their Latvian languaged channels. If you don’t respond to that, they get to keep the money.
In short: you should verify your sources, but don’t beat yourself up for getting lost in this almost criminal world of royalty payments.
LikeLike
That is one complicated, not-really-trying-very-hard-to-pay-royalties system!
As for the problem with not questioning the source this was particularly poignant to me because I am working on this project looking at the quality of online information. And one of the angles that we consider is bias… Anyway, lesson learned 🙂
LikeLike
Hey Ana – How are things? You lectured me at Henley a while ago. I can’t help but throw in my 2c here – I don’t think it’s so much questioning the source that’s the issue on this particular matter – although questioning the source and where one is ‘coming’ from always applies. I have no allegiances to Pandora or any musician for that matter but I have spent several years buying content from the big boys Warner, Universal etc as well as independent labels back in the days when in the mobile industry when we believed we could actually make money from mobile music download VAS – and we did not (this was before apple launched the iPhone and hey presto you had iTunes on mobile rendering other music download services to nothing more than a sad attempt at reinventing the wheel.) The truth is that the money you generate from distribution and pay out gets diced and spliced too many times. If you play the game by the rules, which is what I suppose Pandora does, then you have to pay mechanical rights, performing rights, etc which in the UK are mainly governed by PRS-MCPS. Then there are the actual content fees, publisher’s fees, fees for intellectual property etc…the list is endless. With musicians who are affiliated with a collecting rights society – such as PRS, the money goes to PRS and then PRS distributes accordingly….i.e. assuming the musician is affiliated to a collecting rights society. Not every musician is affiliated. And the radio station or music service provider doesn’t get into dealings between the affiliations and the artists.
Either way the music industry is complex and is changing fast. With up and coming artists airplay time is sometimes more important than immediate revenue – there’s tonnes of music coming out every day and everyone is fighting for those 3 minutes of airtime. Everyone’s ultimate aim is to stand out from all the noise and clutter. Things are changing as publishing has become a totally new game – artists have you tube and other channels like social media which enable them to publish their own work and distribute – not to mention the fact that the way we consume music nowadays has also changed dramatically, redefining what radio consumption used to be in the past.
Obviously Pandora has its agenda and article may have a particular slant – but I think its pretty much genuine in truth.
Anyway – good luck with your project.
LikeLike
Hi Chris – great to see you here. Yes, I remember you – Malta!
Thanks for your 2c – keep throwing them 🙂
I think that the (very complicated!) structure that you are describing is, indeed, what the second article is referring to. The bottom line being that, yes the revenue may be significant, but there are so many players vying for that revenue that the performing artist ends up with very little, indeed.
LikeLike