the continuing battle for our hearts and minds–but mostly our money
Recently, several variations on an email from ASCAP popped up in my email box. They all say something along the lines of “ZOMG! How awful is Pandora Radio? I know you love them, but we’re not making any money off of them. It’s totes not fair.” That may be a slight oversimplification, but you can read the hysterics for yourself here. It’s tough to read things like this, because as people who love music, we love Pandora; as people who love (and are) musicians, we love ASCAP, too.
In their letter, ASCAP states that 1,000 plays on Pandora earns the songwriter an average of eight cents. That doesn’t sound like very much, does it? And you know, you’re right. 1,000 plays isn’t very much. You thought I was going to say 8 dents isn’t very much. Gotcha! Actually, both are true. ASCAP is giving a figure that sounds terrible, but is actually very misleading without a bit more context. It’s the same out-of-context junk-reasoning that leads to headlines like the infamous and equally misleading “My Song Got Played On Pandora 1 Million Times and All I Got Was $16.89, Less Than What I Make From a Single T-Shirt Sale!” (Michael DeGusta has the full debunking.)
Let’s get some context.
First, there was terrestrial radio. Some believe that God created it on the fourth day, right after the lights and stuff. Others believe that Prometheus stole it from Mt. Olympus and brought it to Alexander Graham Bell or something. Many people are surprised to learn that in the United States, when a song is played on the radio, the artist (performer) doesn’t get paid a dime for it. In fact, the artist is often the one paying to be on the radio, but that’s a topic for another rant. Only the composers and songwriters get paid. (This is different in other parts of the world.) Even though this is a recording that is being played in a small room in a shack somewhere, it is counted legally as a “public performance.” To play it, radio stations have to pay for a public performance license from a performance rights organization (PRO). Nightclubs, restaurants, bars, and other music venues have to get these licenses these as well. We have two (okay, two-and-a-half) PROs that deal with this stuff in the US: ASCAP and BMI (and SESAC).
Radio stations and venues get a “blanket” performance license from each PRO. It gives them permission to perform any song that the PRO represents. The cost of that blanket license is determined by the size of the venue. Small clubs pay less than big clubs. Radio stations in small markets (say, South Dakota) pay less than radio stations in big markets (say, Atlanta). The idea is that the radio station in Atlanta is getting more value than the radio station in South Dakota. They have more listeners, and therefore can charge advertisers higher rates. Radio stations report their playlists to the PROs on a regular basis, and the PROs then divide the license rates among their member writers and publishers.
Nielsen – of the television rating Nielsens – measures the reach of a radio station and the songs it plays in “gross impressions.” This is basically multiplying the number of times a song is played by the number of people listening. It gives an idea of the number of times a person, anywhere in the country, heard a particular song. That is a really important distinction between terrestrial radio and Pandora Radio. When a song is played on traditional radio (a “spin” in “the biz”), that’s tens of thousands of impressions at minimum, and potentially reaching a million or more. When a song is played on Pandora, that one spin is worth exactly one impression. Comparing terrestrial radio performance royalties to those of Pandora is a load of crap. Anybody who tries it is either misinformed or lying. Did anybody think that maybe 1,000 Pandora spins might not be worth much more than eight cents? I’m guessing that thought would be considered blasphemy in ASCAP’s swanky Manhattan offices.
My point is this: let’s all settle down. Pandora is providing a great service that people love. They’re paying the people they’re legally obligated to pay. Licensing is their biggest cost by far, and that’s probably as it should be. Furthermore, they’re also paying recording artists, not just songwriters. Last, and most overlooked in these angry arguments, Pandora is following the law and their contractual commitments. None of these artists, labels, songwriters, or publishers signed a deal with a gun to their heads. Maybe songwriters and artists should be paid more for streamed performances, but it’s not Pandora’s fault that they aren’t. If anything terrestrial radio should be paying more. So ASCAP, don’t try to make me feel guilty, and please don’t try to co-opt me and my peers into your greedy, juvenile shouting match.
Photo by Nils Rinaldi on Flickr
Disclosures: I am a composer, but I’m affiliated with the other big American PRO, BMI. Don’t tell either of them, but they’re basically the same.