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Pandora, Spotify and Royalties

Pandora, Spotify and Royalties

Pandora LogoMusician David Lowery, author of the excellent blog The Trichordist, recently caused a stir by posting images from his songwriter royalty statement that shows, while Pandora played his best-known song over 1.1 million times in the past quarter, it only paid him $16.89 in royalties.

The song involved is “Low”, which Lowery helped write and perform as part of the band “Cracker”. Lowery notes that this only deals with this songwriter royalties, he says his performance royalties are higher, and that he only owns 40% of the song. That means Pandora paid $42.25 in songwriter royalties for all of the plays of the song.

Lowery’s move comes as Pink Floyd’s musicians united to pen an oped piece for USA Today blasting Pandora calling it a “royalty ripoff”, noting that the music streaming service is already laying ground work to petition the government to mandate lower royalty rates for itself.

For songwriters, the royalty rates are compulsory, meaning that they are written into the law and set by judges. Songwriters can not opt out of these licenses though, theoretically at least, those who wish to use music can negotiate for a lower rate.

However, songwriters fear that Pandora’s proposed legislation would cut their royalty rates by up to 85%. Pandora says that these cuts are necessary but songwriters feel that they are already being paid a mere pittance and that Pandora is not doing its part to grow its business and bring in more revenue.

So who is right? The problem is a tough one but the answer is important as it could define the future of music online.Continue Reading