- The government sets rates for streaming (why?) that artists have to accept. As David Clowery writes:
...webcasting rates are “compulsory” rates. They are set by the government (crazy, right?). Further since they are compulsory royalties, artists can not “opt out” of a service like Pandora even if they think Pandora doesn't pay them enough. The majority of songwriters have their rates set by the government, too, in the form of the ASCAP and BMI rate courts–a single judge gets to decide the fate of songwriters (technically not a “compulsory” but may as well be). This is already a government mandated subsidy from songwriters and artists to Silicon Valley. Pandora wants to make it even worse. (Yet another reason the government needs to get out of the business of setting webcasting rates and let the market sort it out.)
- These rates are absurdly low. In the article above, Clowery published his income statement, revealing that "As a songwriter Pandora paid me $16.89* for 1,159,000 play of “Low” last quarter."
- Pandora feels that these rates are too high, and - like any big corporation - is lobbying Congress to lower these "compulsory royalties."
So who’s right — Pink Floyd or Pandora?The end result is that the consumer becomes confused by all of this bickering. All I want to do is listen to music while ensuring that the artists get their fare shake. This is why I pay for Pandora Plus for that reason, and continue to buy music from my favorite artists. I suspect that all that this continued obfuscation means that most people simply give up and ignore the problem... which (of course) doesn't make the problem go away. So what's a responsible consumer to do? Check out Spotify or some of the other services out there? Any ideas?
They both have a point. On one hand, it seems absurd that the royalty rate for a radio song should be different based on what sort of device it is played on: “Wish You Were Here” is great no matter if it plays on Pandora, Sirius or an old-school FM station. There seems to be no logical reason to discriminate against Pandora simply because it uses the internet as a delivery device.
As for the musicians, they are right to be concerned about dwindling royalties. The money they used to earn from CDs and records has dropped off a cliff and income from iTunes or Pandora is not making up for it.
Ultimately, this is a choice about how America wants to subsidize its musicians and other artists. On one hand, the multi-layered royalty system developed in the 20th century is not holding up well, and copyright law has become corrupt and over-extended — it makes sense to scrap parts of this system. But on the other hand, though Pink Floyd is doing just fine, it’s not clear if there is enough money in the system to support and develop young musicians.